Daily Fantasy Sports Legality

Daily Fantasy Sports Legality

Disclaimer: It should be made known that I am not a lawyer or any type of specialized legal expert. If you have any serious concerns regarding the legality of Daily Fantasy as applicable to your participation or specific situation, it is recommended you consult with professional legal counsel.

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If you are reading this on RotoGrinders.com, you have probably already realized the huge potential to earn money grinding Daily Fantasy Sports contests. Some Daily Fantasy Grinders are already grossing more than six figures ($US) annually 3 ! With this much money moving around an online sports industry, one is sure to have concerns over the legality of the situation. Don’t worry though; RotoGrinders is here to look out for you. We will always keep you posted on the current legal state of Daily Fantasy Sports and update you on any changes to legislation that are applicable to Daily Fantasy Sports. As of right now though, except for a few situations unique to specific states, Daily Fantasy Sports is 100% legal and has a bright future. Here is a breakdown of the current legislation involving Daily Fantasy Sports:

UIGEA and the History of Internet Gambling

UIGEA stands for: The Unlawful Internet Gambling Enforcement Act of 2006. This is the grand-daddy of online gambling laws. Essentially, the UIGEA seeks to regulate the financial intermediaries (banks and other financial institutions) that act as the monetary link between Internet gambling consumers and Internet casinos. The UIGEA was passed in September of 2006 after Congress purported to use 3 other Federal laws to regulate Internet gambling unsuccessfully. The UIGEA’s passing was controversial, being that it was tacked onto the SAFE Port Act which was a very important non-partisan bill that was unlikely to be voted down. The passing of the UIGEA dealt a serious blow to the Internet gambling industry, causing 3 of the industry leaders to immediately pull out of the US market, with some losing up to half of their total market value. Still, many companies held strong and remain in business to this day. Most are confident in their interpretation that the UIGEA is targeted at prohibiting online gambling or that it is illegal, and instead on the business end of enforcing online gambling. The future of online Internet gambling, is at the moment uncertain 1, but currently congressman Barney Frank of Massachusetts is actively pushing to legalize and regulate Internet gambling with congress.

State Law:

According to a Journal article by Anne Von Lehman, as of 2008 the UIGEA federal law blanketed all 50 States’ laws 1. However, some states have state legislation that some lawyers could interpret as questionable or unclear. That has led to sites such as Fan Duel restricting offer of any paid games to the states of Arizona, Iowa, Louisiana, Maryland, Montana or Vermont (where FanDuel’s lawyers found the state legislation unclear or questionable) 3.

Application to Daily Fantasy Sports

So, the big question here is: Does Daily Fantasy Sports count as Internet Gambling? The short answer is “No.” The UIGEA specifically states that:

(ix)

[The UIGEA does not include] participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:

What Does This Mean???

Based on my interpretation, I have constructed a list of ‘Dos’ and ‘Don’ts’ that Daily Fantasy Sites should be abiding by in order to remain in accordance with the UIGEA. [Now is the time to re-read the disclaimer at the top of the page if you haven’t already]. As long as a site is in accordance with the terms above, and isn’t a state that specifically bans online Fantasy Sports (as mentioned in the section above), then Daily Fantasy sports is entirely legal. If for some reason the site you are playing on isn’t following one or more of these stipulations, you may want to contact them directly for an explanation, or you can make a post about it in our Forum :

RotoGrinders will continue to monitor the legality of Daily Fantasy Sports for you, and if there are any changes or updates we will be sure to update our users right away! In the meantime if you have any questions, comments, or concerns start a discussion on them in our Forums !

Good Luck Grinding!

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Sources:

1 – Von Lehman, Anne. American Entrepreneurs and Internet Gambling: Are the Odds Stacked Against Them? 2008, Entrepreneurial Business Law Journal. Vol 3:1. p. 135
2 – http://www.fanduel.com/public/pp_legal
3- http://www.playwinningpoker.com/online/poker/legal/uigea/

About the Author

Cameron
Cameron MacMillan (Cameron)

Cameron MacMillan is an entrepreneur and angel investor, who co-founded RotoGrinders in 2010, alongside Cal Spears and Riley Bryant. Cameron operated as the COO, creating & implementing a multitude of business & content systems for the company over the course of 11 years, before Better Collective completed its acquisition of RG in 2021. In 2022, Cameron stepped back into an Advisory Role.