The Unregulated World of Fantasy Sports

Online fantasy sports is a multibillion dollar industry, but it is unregulated.  This week a major scandal erupted when DraftKings admitted that an employee inadvertently released data before the start of the third week of N.F.L. games, and then subsequently that same employee won $350,000 at a rival site, FanDuel.  Although both companies claim to have strong policies in place to ensure that employees do not misuse any information, state and federal authorities are now looking into regulating the industry.

The Unlawful Internet Gambling Enforcement Act of 2006 prohibits online gambling, but makes an exception for online fantasy sports.  Among the criteria to qualify for the exception, the fantasy sport must have “[a]ll winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of performance of individuals (athletes in the case of sports events) in multiple real world sporting or other events.”  31 U.S.C. § 5362 (1)(E)(ix)(II).  The federal law sees fantasy sports as a game of skill and not a game of chance.  However, the federal law did not foresee the daily fantasy sports that we have today.  Now elected officials are discussing regulating the industry at the federal and state level.

Follow the link below to hear my discussion about this topic on Boston Herald Radio on 10/6/2015:

https://soundcloud.com/bostonherald/lawyer-mark-donovan-draft-kingsfan-duel

 

Follow the link below to read the related article published in the Boston Herald on 10/7/2015:

http://www.bostonherald.com/news_opinion/local_coverage/2015/10/whos_behind_draftkings_upstart_co_has_some_big_time_backers

 

Considine & Furey, LLP specializes in gaming law in Massachusetts.  Please let us know your thoughts and comments.

Posted by Mark D. Donovan, Esq.

 

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