Draftkings which is partly owned by Major Leagues baseball says on their web site that they are 100% legal because they are games of skill and the federal and state governments agree that games of skill are not gambling. Is this true? I remember when bridge was declared to be a game of skill in California but it is still illegal to gamble at it almost everywhere. What is the straight dope?
Title 31, Section 5362(1)(E)(ix) of the United States Code says that it is not illegal to use the internet for:
“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:
(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
(III) No winning outcome is based—
(aa) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or
(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.”
(III)(aa) is there to prevent somebody from masking game-level gambling as fantasy betting using a system of “you select a team, and you get 1 point for every point your team scores”; (bb) is probably there to prevent betting on something like golf (“your score is 1000 minus the number of strokes your selected golfer took”).
Note, however, that Title 28, Section 3702(2) says that it is illegal for “a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity, a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.” You would think that this would make fantasy sports betting illegal.
Side note: the NCAA considers fantasy sports betting illegal if you have to pay to enter the league and there is any prize (not necessarily cash) for the winner.
Thanks for the response. Maybe we will wake up one morning and find out that the feds have closed them down like they did with the poker sites.
They didn’t “close the poker sites” so much as they made it illegal for credit card companies in the USA to have transactions with them. In fact, the law I quoted is part of the law that made it illegal.
At first, I suggested a way around it - open an offshore bank account, put money into that, then use that as your account for the poker site - but it has gotten much harder to open an offshore account with less than something like $100,000 in recent years.
Wouldn’t it always be illegal to use any telephone company that collects federal taxes or in some other way involves interstate commerce to aid in this gambling?