Luck or Skill? The Daily Fantasy Sports Battle in New York

www.betterlivingthroughbeowulf.com

www.betterlivingthroughbeowulf.com

Ben Radhuber, Staff Writer

 

Daily fantasy sports has seen a huge boost in popularity over the past year, giving average sports fans a chance at winning large sums of cash in daily contests, depending on the performance of the players they choose in just about every sport, from the NFL to NASCAR. With numerous contests to choose from, you have the freedom to decide how much you want to risk– depending on contest size, entry fee, and total winnings (the more people there are entering, the more money you have a chance of winning, but your chances of winning also decreases). Television commercials that portray average people winning millions of dollars in daily contests have captured the attention of sports fans everywhere, especially those who seek to escape the enclosure of season-long fantasy leagues. DraftKings and FanDuel are the two websites that lead the way in what has become a booming multibillion-dollar industry, blanketing television with advertising on every major sports channel.

Daily fantasy sports, including DraftKings and FanDuel, are banned in six states, and may soon be shut down in New York as well. On November 10th, New York State attorney general Eric T. Schneiderman ordered DraftKings and FanDuel to stop accepting bets from New York residents, saying that their games constituted illegal gambling under state law. The cease-and-desist order by Schneiderman is a major blow to the industry that has introduced sports betting to young sports fans and formed partnerships with many of the nation’s professional sports teams. “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” Mr. Schneiderman said, adding, “Today we have sent a clear message: not in New York, and not on my watch.”

Fantasy sports companies argue that their games are not gambling because they involve more skill than they do luck and were legally sanctioned by a 2006 federal law that exempted fantasy sports from a prohibition against processing online financial wagering. That view is being challenged, especially because fantasy sites have begun offering million-dollar prizes and bets on individual sports, such as golf, mixed martial arts and Nascar races, magnifying the element of chance and making the exemption more difficult to defend. The attorney general’s office added that daily fantasy sports “appears to be creating the same public health and economic problems associated with gambling.” The National Council on Problem Gambling says it has received reports of “severe gambling problems” in some people who play daily fantasy sports, while noting that seasonal competitions with minimal prizes “offer little risk.”

The two companies can challenge the attorney general’s order in court. According to Joseph M. Kelly, a professor of business law at the State University College at Buffalo, the state would have to prove that chance is a material factor in fantasy sports, which would make it gambling. State Supreme Court judge Manuel Mendez was formally asked by Schneiderman to shut the companies down on November 17th. Judge Mendez listened to arguments from attorneys representing Schneiderman, DraftKings, and FanDuel during an emergency hearing in a Manhattan court and said afterward that he planned to rule soon on the attorney general’s request for an injunction.

For the more than 500,000 daily fantasy sports players in New York State, this is an enormous battle that is sure to impact their lives as sports fans. DraftKings even sent an email to its players, saying, “Attorney General Eric Schneiderman is considering preventing New Yorkers from playing daily fantasy sports,” and added: “Hey, New York, protect your right to keep playing daily fantasy sports. Contact the attorney general today!” DraftKings had a pre-written email (open to editing) for New Yorkers to personally send to the attorney general, demanding to let them play daily fantasy sports.  FanDuel released the following statement: “Fantasy sports is a game of skill and legal under New York state law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country.”  FanDuel has stopped allowing entries from New Yorkers, while DraftKings will continue to allow New Yorkers to play in cash games as usual until a final verdict is made, which will be soon as promised by Judge Mendez. Angry New Yorkers have begun protesting the decision, picketing in New York City near the attorney general’s office, holding signs and wearing shirts that read “LET US PLAY,” arguing that the state has bigger things to worry about than disrupting sports fans from enjoying themselves.

As an avid season-long and daily fantasy sports player myself, I personally believe that daily fantasy sports are more of a game of skill than a game of chance. In order to have the perfect lineup and win the top prize, yes, you do need a little bit of luck. However, it is near impossible for someone to win a lot of money playing daily fantasy sports based solely on luck. The state is being a bit hypocritical in my opinion, as the only reason the lottery is legal is because the state receives a cut of the revenue. The lottery is based completely on luck, while daily fantasy sports requires knowledge, strategy, and skill. If the lottery is legal, daily fantasy sports should be too. Daily fantasy sports has become a big part of my life as a sports fan, as I only have to enter 1-5 dollars with the chance of winning hundreds of thousands of dollars, and I have a good chance at making some profit or getting my money back (the pot is usually dispersed amongst the top third of the leader board). I, along with 500,000 other New Yorkers, are hoping that the judge rules in favor of letting us play, because it gives the common sports fan a chance at turning their love and knowledge for sports into money– something that all sports fans dream of.