Public Gaming Magazine November-December 2015

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IS FANTASY SPORTS AND DAILY FANTASY
SPORTS GAMBLING A “GAME OF SKILL,”
OR BOTH?
There is no universally accepted textbook clarification about
how to classify games-of-chance that involve both skill and
chance. The commonly accepted definition of gambling (Chance
+ Consideration + Prize) does not specify how much chance is re-
quired to constitute gambling. Poker, for instance, involves both
skill and chance. The Federal Eastern District Court of NY ruled
in 2012 that since poker involves skill, it is not to be classified as
“gambling.” That ruling was then overturned by the Second Cir-
cuit Court. The thing is, even the original ruling by the Eastern
District Court that said that operation of poker does not violate
the UIGEA does not preclude the state from exercising its right
to classify poker as gambling and to regulate it as such. It is pres-
ently up to the states to take action to classify a game, like poker
or FS or DFS, as gambling and how to regulate it.
It is inarguable that DFS and FS include an element of chance.
For that reason, many regulators and industry leaders are positing
that DFS and FS should be classified as gambling. “You put up
something of value, like cash, to win something of value, cash,”
said Joe Asher, CEO of sports book operator William Hill U.S.
“It’s the classic definition of gambling.” MGM Resorts Interna-
tional Chairman Jim Murren said sports officials are “absolutely,
utterly wrong” when they argue that DFS in particular is not
gambling. And the seven states that are exercising dominion over
the regulation of DFS and FS are classifying them as gambling.
DOES DAILY FANTASY SPORTS BETTING
POSE LESS OF A THREAT THAN SPORTS
BETTING IN TERMS OF INTEGRITY AND
PROBLEM GAMBLING?
The prevailing notion is that since DFS is based on the stats
of individual performance and not the outcome of the game,
it therefore poses less threat to corruption and manipulation
of the betting results. Seth Palansky, Caesars Interactive En-
tertainment Vice President of Corporate Communications,
contends that DFS pose an even more dangerous for the in-
tegrity of professional sporting contests than traditional sports
betting. His reasoning is that DFS games rely on individual
player stats rather than the outcomes of entire games, there may
be more scenarios in which players could be convinced to alter
their performance. Theoretically, athletes could manipulate the
DFS outcome by deliberately fumbling or dropping a pass or
missing a tackle or a block. They could even do that in a cir-