Fantasy sports sites constantly refer to their business as a skill game.
DraftKings asserts on its website, “Daily fantasy sports is a skill game and is not considered gambling.” DraftKings does not cite how it drew that conclusion.
FanDuel does not go that far, but explains its exemption under the Unlawful Internet Gambling Enforcement Act on its Legal page.
Draftday goes on to explain the three prongs of how a game would fall under the UIGEA exemption, which are not the same as the three prongs typically used to determine if a game is gambling.
The argument as to whether daily fantasy sports is legal is one the lawyers should have. The sites are comfortable with the current legal opinion and there is little debate about its legality in most states at this time. Whether fantasy sports is gambling or not using the traditional definition is a completely different discussion.
What is gambling?
A UIGEA carveout does not automatically mean that a game is not considered gambling.
Horseracing also received an exemption under the UIGEA. Any intrastate gambling over the Internet that is specifically regulated also received a carve out, including lottery ticket sales. It is hard to argue that these are skill games.
Gambling typically has three elements: consideration, chance, and prize.
Consideration is typically defined as something of value that a player puts up on the hope of winning something else of value. It does not have to be cash.
Fantasy sports involves a degree of skill, but it also hits on all three prongs of the common definition of gambling.
A player puts up consideration to enter the contest. He then has a chance that the players he chose will perform better than the ones picked by his opponents.
If his picks are better than others in the same pool, he will win money.
No matter how much skill a player has, a key player could be injured early in the game. He could also be pulled before the end because the outcome of the game is decided early and the coach does not want to risk injury.
A player on an opposing team could generate a high number of points in what is called garbage time, even though his team has no chance of winning. His player may also have an off day and be responsible for turnovers.
All of these scenarios fall outside of the player’s control. This is the chance element.
It isn’t just daily fantasy sports that involves chance. Season-long contests also have an element of chance.
Adrian Peterson placed an average of third in season-long fantasy drafts in 2014. He played one ineffective game before sitting out the rest of the season. Injuries and suspensions play a major part in season-long fantasy sports, something completely beyond the level of skill a player brings to the table.
Other forms of gambling have an equivalent or higher degree of skill, yet are still considered gambling.
Fantasy sports versus poker
A fantasy sports player drafts participants and then goes all-in immediately.
In daily fantasy, the player is stuck with his choice once the game starts. If a major component of his draft leaves on the first play from scrimmage then his card becomes a huge underdog.
A poker player can pick up a bad hand on the first deal and fold. He can sit back and wait for a better scenario to put chips into the pot. Only a small percentage of chips are forced when the blinds come around, or in some tournaments or games, antes.
A poker player can also bluff when he is behind. This may get a player with a better hand out of the pot. There is no bluff element in fantasy sports games. Once a player has committed his picks and the game starts, the rest of the outcome is left to chance.
Fantasy sports versus sports betting
A key injury in a fantasy sports event can make it nearly impossible to win. The same cannot be said for point spreads.
An individual player, no matter how great, is often worth less than a field goal. If a star running back or quarterback is knocked out of the game due to injury, then the rest of the team can still manage to win or cover the spread.
A total is largely unaffected by injuries. The same can be said for futures bets on wins and losses, as well as championships. A team with decent depth or an undiscovered talent can replace an injured player. A fantasy lineup has no backups to replace an injured player in the middle of a game.
Fantasy sports no more or less gambling than traditional games
There is no debate that players with a higher level of skill will win more money at fantasy sports than casual participants. The same can be said about poker, sports betting, blackjack, and in some cases, even video poker.
That does not make any of these games a skill game.
A skill game is typically defined as one where skill is the only or predominate element and little or no luck is involved at all. A game of chess, checkers, arm wrestling, or duplicate bridge would fall under this definition.
Fantasy sports simply does not qualify under any objective person’s view of what falls under the skill game definition. The fact that it has an exemption under federal law, one that does not preempt state law, is hardly proof that a game is solely based on skill.
It is time for the industry to recognize and accept this.