Forbidden Games?

In a New York court, the state is seeking to ban fantasy league companies like FanDuel and DraftKings because they are a form of gambling.  Other states are lining up to do the same.  The industry is trying to make the argument that the fantasy sport leagues are games of skill while the states attempt to argue it is a game of chance and therefore, gambling.  Such companies have the approval of most major sports leagues and with an ever growing customer base, the industry represents billions of dollars in annual revenue.  Outcomes are hard to predict but what is certain is that the case will not end in New York.

In full disclosure and as a sports fan, I have an issue with companies like FanDuel and DraftKings because it has nothing to do with fandom.  One could say it is the anti-thesis of fandom so I’m working up a feeling of schadenfreude on the hopes that such companies are indeed banned.  These leagues are creating followers who are adherents not to a particular team or sport but to players and outcomes for the purpose of making money.  All of the noble qualities that sport possesses and the life lessons it teaches are thrown out the window with fantasy sports.  But, I digress. 

I heard a story on National Public Radio about the case and heard from one of the more successful fantasy sports players – he was able to quit his job as an accountant to do fantasy sports full time.  He said his job has nothing to do with gambling because of the skill involved.  He mentioned that about 90% of all earnings on FanDuel are earned by just over 1% of the players.  The fact that skill weighs so heavily in who wins and who loses makes it an “obvious game of skill by any definition” and therefore, not gambling.

First, it would seem that there is a distinction in some minds, partly in how the New York Attorney General’s office has defined it, between games of chance and games of skill.  This distinction, to some, seems to define what is and what is not gambling.  Gambling can certainly be both.  Take poker for instance.  A reasonable person would agree that there are good poker players and bad ones.  That same person would also agree that poker, while chances of winning can be enhanced by the skill of the player, is also a game that depends on how the cards fall.  No matter how good you are, if you get bad cards, you are not going to win.  Both of these scenarios make poker both a game of chance and a game of skill.  However, nearly all people would see poker for money as gambling. 

Secondly, each person who plays with FanDuel or DraftKings pays money up front to take part in the fantasy leagues.  The industry says that the money paid out initially by participants is simply money paid to play.  As DraftKings lawyer John Kiernan said, it is not a wager or bet and the participants are not risking anything of any real value.  If money paid to participate is not anything of “true value”, I’m not sure what is.  It certainly seems like a wager to me.  Commercials for such companies promise the chance of winning hundreds of thousands of dollars.  Is that not the whole idea of a wager – money paid in hopes of winning more? 

When you take part in a fantasy league, you are betting that the players you have chosen will play well enough for you to “win” your league – and by doing so, you will also win money.  Such endeavors are both games of skill and games of chance: much like poker.  And by any definition, the fantasy sports players are gambling.  Now, this is not an article damning gambling.  I don’t like it and don’t partake but it is a person’s choice to lose all that money.  However, I also find the practice of fantasy sports a little annoying so if the law can come down on the corporations earning billions off of this, I would not be devastated.