{"id":3708,"date":"2015-10-14T10:45:02","date_gmt":"2015-10-14T14:45:02","guid":{"rendered":"http:\/\/ncjolt.org\/?p=3708"},"modified":"2020-06-04T20:53:34","modified_gmt":"2020-06-04T20:53:34","slug":"future-of-online-fantasy-sports-uncertain","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/future-of-online-fantasy-sports-uncertain\/","title":{"rendered":"Future of Online Fantasy Sports Uncertain"},"content":{"rendered":"

Fantasy sports have been popular in America for decades. It is estimated that around 31 million Americans<\/a> play fantasy sports each year, creating fantasy rosters of real players from different sports teams and accumulating points based on each player\u2019s performance in actual games. Traditionally, a group of friends or co-workers would use the same team roster for an entire season and compete for prize money awarded at the end.
\nRecently however, the entire format of the game has changed. In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act<\/a> which prohibits Internet gambling\u2014making online poker, online casinos, and other online games against federal law. At first, major sports leagues wanted to extend the ban to online fantasy sports, an online version of traditional fantasy sports, but changed their position at the last minute. As a result, fantasy sports were excluded from the law and sports leagues hoped online fantasy would increase fan interest<\/a> and be good for business. Proponents of online fantasy sports say it helps teams \u201cdraw fans<\/a> when they are struggling at the box office\u201d and \u201cit has had an immediate impact on the cultural landscape at a time when the appetite for sports wagering is at a peak.\u201d
\nTwo online fantasy sports companies in particular have been runaway successes, FanDuel<\/a> and DraftKings<\/a>. On these sites, players pay an entry fee and can create multiple fantasy lineups every week. The companies have secured astounding support and financial backing; FanDuel has $363 million in financing and DraftKings has $426. The two companies have deals<\/a> with NFL teams, NBA teams, and NHL teams plus relationships with ESPN and Bleacher Report, and they have big name companies as investors (think Google and Comcast). To continue their success, the companies launched outrageous ad campaigns this year to the extent that \u201cDraftKings and FanDuel outspent the entire beer industry<\/a> in the month leading up to and including the NFL\u2019s opening season.\u201d These ads promise huge payoffs<\/a> to winners, cash prizes, and testimonials in an attempt to attract as many players as possible to the sites.
\nWhile these sites are currently legal, many people are calling for increased scrutiny and regulation after a DraftKings employee won $350,000 on FanDuel<\/a> the same week as that employee released data online about which football players site participants were choosing. This data, not available to the public until after the rosters are closed, could create an advantage because \u201ctop prizes are often won by individuals with a player who appears on fewer rosters but comes through with a big game<\/a>.\u201d While it is disputed if the employee used this information to create his successful roster, the fact that employees of one site could potentially use this information to win on other sites led to allegations of insider trading<\/a> last week.
\nIn response to the allegations, both sites released statements \u201cdefending their businesses\u2019 integrity” and have now temporarily<\/em>\u00a0prohibited their employees<\/a> from playing games on other company\u2019s sites in addition to already prohibiting employees from playing games or tournaments on their own company sites.
\nDespite assurance from the two sites regarding the use of data by employees, consumers are still very concerned.<\/p>\n

\u201cIndustry analysts\u201d<\/a> are calling for the likelihood of future criticisms regarding the loose regulations of online fantasy sports.<\/p><\/blockquote>\n

Additionally, Lawmakers have been discussing whether \u201cdaily fantasy games are pushing the boundaries<\/a> of . . . [the] law that has allowed them to operate.\u201d Representative Frank Pallone Jr. from New Jersey has requested a Congressional hearing<\/a> to study the relationship between gambling and online fantasy sports in response to these conversations. Representative Pallone commented that these sites are enjoyable for sports fans and a big part of how they experience the games, but \u201c[d]espite how mainstream these sites have become . . . the legal landscape governing these activities remains murky and should be reviewed<\/a>.\u201d
\nFurthermore, a class action lawsuit<\/a> was filed last Thursday in federal court in Manhattan, accusing the two sites of \u201cnegligence, fraud and false advertising.\u201d<\/a> Adam Johnson, plaintiff, alleges that in light of the information regarding how the sites\u2019 employees can use data to win on competing sites, Defendants misrepresented the contests as \u201cfair games of skill<\/a>,\u201d when in reality Plaintiff and members of the class \u201cwere competing against individuals with insider knowledge, access and use of non-public data.\u201d
\nCurrently the fate of online fantasy sports is uncertain. Some, like NBA commissioner Adam Silver, are calling for the legalization of betting<\/a> on professional sports all together. Critics however, see online fantasy as a game of chance and \u201cde facto gambling<\/a>\u201d and should be against the law. Others simply have questions about the sites\u2019 legality as they are currently operating; while the sites market themselves as \u201cskill-based games<\/a>,\u201d is that an accurate portrayal of how the sites work? Despite the varied viewpoints in the US, one country considers online fantasy a form of gambling: when DraftKings expanded its business to England \u201cit had to apply to the United Kingdom\u2019s gambling commission<\/a> for a license, which was granted last month.\u201d \u00a0Despite the confusion regarding this area of law, it seems clear that scrutiny will only continue to increase for online fantasy sports websites and their fate will remain uncertain until Congress and the court system further explore this issue.<\/p>\n","protected":false},"excerpt":{"rendered":"

Fantasy sports have been popular in America for decades. It is estimated that around 31 million Americans play fantasy sports each year, creating fantasy rosters of real players from different sports teams and accumulating points based on each player\u2019s performance in actual games. Traditionally, a group of friends or co-workers would use the same team …<\/a><\/p>\n","protected":false},"author":1,"featured_media":3709,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/3708"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=3708"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/3708\/revisions"}],"predecessor-version":[{"id":7282,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/3708\/revisions\/7282"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media\/3709"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=3708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=3708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=3708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}