Daily Fantasy Sports ‘Gambling Or Skill’ Argument Is Nothing More Than Circular Reasoning

November 13, 2015
Daily Fantasy Sports ‘Gambling Or Skill’ Argument Is Nothing More Than Circular Reasoning

With legislators and attorneys general bearing down on them, the daily fantasy sports industry is adamantly clinging to the mantra that their contests are games of skill and not gambling.  The first assertion is incontrovertible; the second assertion, that DFS is not gambling, is more in doubt.

Because there simply isn’t a steadfast definition of what constitutes gambling from a legal or even a casual perspective, it boils down to an individual point of view. Clinging to the “skill game” argument may be doing more harm than good, especially with regulation no longer a matter of if, but when.

Circular reasoning and DFS

The biggest problem with arguing for or against DFS being gambling is a lack of irrefutable proof.

If you start from the point of view that DFS isn’t gambling, you can dig up plenty of evidence to back up your claims, beginning with the simple fact that skilled players win in the long run, and several states have concluded fantasy sports are games of skill.

On the other hand, if you start from the point of view that DFS is gambling, you can just as easily make that case, as an unskilled player can win on any given Sunday, a poor call by a referee or a last-second turnover has caused million dollar swings, and several states treat fantasy contests as gambling.

Even DFS legend Peter Jennings has said as much, “I had a touchdown overturned in Week 4,” Jennings said. “It ended up costing me $1.5 million. It’s pretty crazy. The smallest things.”

So when it comes to the “is it or isn’t” question, there is no right or wrong answer. It all comes down to one’s point of view. Are Democrats ruining the country? Are Republicans in the back pocket of billionaires? Is Donald Trump a buffoon or is he speaking for the downtrodden? It depends on who you ask, and most of the time those people are as animated about that answer as DFS advocates are about calling DFS contests games of skill.

How a state classifies gambling varies

The entire argument can be boiled down to two core questions:

  • How much skill is involved in DFS?
  • And how much skill does it take to move something out of the gambling category and into the skill game category?

The problem with answering these questions should already be apparent. First, it’s nearly impossible to quantify skill in a game like DFS or poker (the former has a number of variants in which skill plays varying roles); and second, the relative amount of skill a game needs to not be gambling is subjective. Gambling is one of those, “you know it when you see it” things (something even casino CEO’s have said), and depends on a number of factors, including the amount of money at risk, who is playing, and even where the game is taking place.

For example, most people don’t consider grandma and her five friends playing Whist for 10-cents a point around the kitchen table gambling, but they do consider Uncle Joe and his five friends playing Whist for $50 a point in the back of a bar gambling.

Most people don’t consider filling out a $5 NCAA tournament bracket gambling. Some think playing in the $20 buy-in Millionaire Maker on DraftKings on a couple of Sundays during football season is not gambling, but if you play in dozens of DFS contests daily, you are.

This is why state laws are so varied when it comes to what is and what isn’t gambling (potential revenue also comes into play when a state decides what kind of “gambling” is legal), and this is why FanDuel and DraftKings don’t operate in several states. It’s also why FanDuel and DraftKings had to apply for a gambling license in the UK in order to operate there. What is and isn’t gambling is as hard to answer as:

  • Is milk good or bad for you? What about meat?
  • Was Larry Bird better than Magic Johnson?
  • Is Boston a better place to live than Minneapolis?

What is and isn’t gambling is up to the state and/or country. Even Joe Brennan Jr., one of the DFS industry’s biggest advocates, has questioned whether DFS companies should be trying to tell legislators what is and isn’t gambling:

Final thoughts

The question legislatures and the DFS should be trying to answer instead is; how do we effectively craft legislation and/or regulations that will not hamstring the industry?

Going to war over a designation that you’ve already conceded in several locales (most notably in the UK) seems like can of worms one should try to avoid. The real focus should be on creating a viable long-term future for DFS, whether a state calls it gambling, a skill-game, skill-based-gambling, or a board game.

Now that regulation appears inevitable, what DFS is called shouldn’t matter.

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