There is something to be said for keeping a low profile. Apparently, daily fantasy sports companies DraftKings and FanDuel are not fans of the idiom, as viewers that tuned in to week 1 action of the NFL were inundated with commercials from both companies. The volume of the ads apparently caught the attention of New Jersey Congressman Frank Pallone who, as this article notes, has called for a hearing to explore the relationship of fantasy sports and gambling.
Daily fantasy sports companies argue that they do not facilitate “gambling” on sports because daily fantasy is more “skill” than luck, and therefore distinct from traditional sports betting. Legally, they are relying on the 2006 Unlawful Internet Gaming and Enforcement Act (UIGEA) that carved out an exception for “fantasy sports” subject to certain qualifications.
Congressman Palone’s quote (in the article) reflects his skepticism at the skill/chance distinction: “Fans are currently allowed to risk money on the performance of an individual player,” Pallone said. “How is that different than wagering money on the outcome of a game?”
As reported in a prior blog post, Congressman Pallone’s announcement comes on the heels of a report that the Michigan Gaming Control Board believes that daily fantasy sports may not be legal in Michigan.
Much like this football season, it appears that the buzz concerning the legality of daily fantasy sports is just getting started…
Now is a good time for businesses involved with fantasy sports to revisit the legal issues that may impact their business models.