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Berginski: Is It or Isn’t It Gambling?

By Staff | Oct 9, 2015

Fantasy football: You know of it as the thing your husband, son, grandson and/or your daughter’s boyfriend are probably playing right now. Or you might also know of it as the thing people play when they’re done playing the video game series “Madden”, because they don’t want to keep breaking controllers due to some “noobs” (newbies) always going for it on 4th down and long. (Grr, it’s so frustrating.)

It’s not some kind of basement phenomena just a few people play. The Fantasy Sports Trade Association, out of Chicago, estimates that 41 million people a year play fantasy football, 18 percent of whom are teenagers. For a further breakdown, 80 percent of players are male, almost 90 percent are white, 78 percent have a bachelor’s degree or higher. A big draw is that it is free, for the most part.

It has become so commonplace that smartphone users can buy apps strictly for fantasy football. Heck, “The League”, a TV show on FXX Network, helped make it even more mainstream than it was in previous years.

Sports fans watching football on Thursday, Sunday and Monday evenings have probably heard of, or seen ads for sites like DraftKings or FanDuel. They’re fantasy football sites that promise no weekly commitments and potentially big payouts.

You’re probably thinking it sounds too good to be true, or you’re asking yourself, “Is this even legal?” Currently it is, due to a loophole in the Unlawful Internet Gambling Enforcement Act of 2006 which classifies fantasy sports as games of skill rather than chance. But that status could potentially change due, in part, to legislation on the rise as well as a scandal tantamount to insider trading.

And in a way, it also should change because for some people it is not clear where skill ends and chance begins with regards to fantasy sports. Or better yet, we need to differentiate which way of playing fantasy sports is and isn’t considered gambling. (I’m personally not opposed to gambling, but I see a very murky distinction here, one that, at the very least, needs to be cleared up as soon as possible.)

This week California state Assemblyman Adam Gray introduced a bill that would create possible fees, taxation and new rules, as far as the state of California is concerned. And the New York Attorney General’s office launched a probe into both sites, after it was found that a DraftKings employee won $350,000 on FanDuel and the employee allegedly had insider information on certain professional football players – information that could’ve made for an un-level playing field for some users. Both sites have since banned their employees from playing daily sites.

Both sites were gambling on their profitability by advertising aggressively and hoping to catch revenue from both advertising and current and new players alike. And it appears to be working. (FanDuel, for example, thrived. According to a USAToday article, last year it saw over 1 million users and over $1 billion in revenue.) Also, with a loophole in place in Internet gambling laws, these sites have flourished in a market once cornered by free to play avenues and without any regulation or oversight at all. Which means that for something like an insider information scandal to happen was only a matter of time. (And if not that, then a massive data breach affecting millions of users could’ve got this conversation started too.)

The reason fantasy football is considered a skill game goes a little something like this: People create and manage a team with real NFL players. Person A’s team could consist of Teddy Bridgewater (quarterback), Le’Veon Bell and Eddie Lacy (running backs), Demaryius Thomas and Golden Tate (wide receivers), Tyler Eifert (tight end), Adam Vinatieri (kicker) and the Atlanta Falcons defense. Challenger Person B has Eli Manning (QB), Darren Sproles and Danny Woodhead (RB), James Jones and Antonio Brown (WR), Rob Gronkowski (TE), Blair Walsh (K) and the Cleveland Browns defense on his team. Each player in each position has a projected amount he is supposed to score, which is based on weekly output, injury status, and whether or not his respective team has a bye week in real life. “Team” owners select players before the actual NFL season begins, and then have the option of trading, picking up or dropping players as the season progresses. (DraftKings and FanDuel, however, say a new season begins each time one plays.) Depending on the format, rushing yards, passing yards, touchdowns, fumble recoveries and sacks are counted as points.

But projections aren’t always reality. To use Person A as an example, let’s say Bell is projected to score 15 points when the Steelers play the 49ers. If Steelers QB Ben Roethlisberger completes passes to Brown a lot instead of handing the ball off, Bell won’t score as much. Now let’s say Eifert was only projected to score 11 points when the Bengals play the Browns, and Bengals QB Andy Dalton is having a field day passing to Eifert for three touchdowns; Person B’s defense loses points because of points they allowed, and Eifert surpasses his projections.

Say someone was in a position to know something was up with the Browns defense in the above example, and set his or her lineup accordingly on a daily fantasy for money site. If word of it got out, other players would feel as though he or she had an unfair advantage, or that games are rigged in favor of the site’s employees. And that’s kind of where we are right now.

Once players step on the field, that’s where the lines blur between skill and chance. For players who play for free and on a weekly basis, the distinction may not be needed because they have nothing to lose. When money or some other prize is in the mix, the distinction becomes all the more necessary.

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