Are Daily Fantasy Sports Sites Ready to Concede What They Do is Gambling?

When assisted with the promotion and other aspects of the first ever Daily Fantasy Sports Expo in Miami Beach, organizer Marc Lesnick was told by a number of entities within the industry – “Do not associate your event in any way with gambling”.

With DFSE having scheduled its next event March 3 and 4 at the fabulous Hotel Deauville in Miami Beach, the “G” word cannot and will not be avoided, in fact, companies in the sector may have no other choice but to embrace it.

That’s because fantasy sports was explicitly carved out of a gambling prohibition act in 2006 along with horse racing and state lotteries.  Make no mistake about it, all are forms of gambling, otherwise there would not have been a need to exempt them in the first place.

At the time, there was no such thing as Daily Fantasy Sports.  The concept allows an individual to enter one-day or one-week contests (for the NFL) with prizes awarded immediately.  New contests start daily or weekly as opposed to having to wait out an entire season.

The Nevada Gaming Commission considers Daily Fantasy Sports a form of gambling and last month abruptly ordered DFS operators to cease conducting business in the Silver State until they obtain a license.  New Jersey could soon follow suit.

The problem is, when the Unlawful Internet Gaming Enforcement Act (UIGEA) was passed in 2006, fantasy sports as a whole was considered gambling as per that exemption.  Based on this assessment, Nevada would have to require the likes of CBS Sports and ESPN to obtain a license in order to run their season long fantasy sports contests as well.

Daily Fantasy Sports sites may not wish to run away from the idea that they are gambling.  Instead, they should embrace the concept. 

And some are.

PokerStars newly formed DFS site, StarsDraft, has already announced it will only operate in states where it is legally licensed to do so.  Many of those licenses will be handed out by state gaming commissions.

- Aaron Goldstein,

By CCostigan