Why is gambling against. The fantasy sports skill game debate won’t go away

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[toc]Whether everyday fantasy sports are in fact a gambling game or a game of skill will probably never be met to anyone’s satisfaction. On both sides have their arguments, although many people may agree that this is a form of play that involves a lot of skill.

NBA Commissioner Adam Silver said what a lot of people think, stating that all the debate about skills versus chance in DFS was “unnecessary” in comments to SXSW last week.

Unfortunately, DFS exists at a time when etiquette – skill or play – is still extremely important, for a variety of reasons.

The latest example came from New Jersey, where legislation that would regulate fantasy sports does not explicitly call it a game of skill; As such, fantasy sports industry, DraftKings and FanDuel opposed the bill.

So why won’t the debate go away, and why will the competence versus luck debate rage in states across the country?

It’s the problem of legality

The main reason why the fantasy sports industry can’t and won’t give in the game designation? This could have a cascading effect in a number of states if it were to do so.

We’ve already seen seven attorneys general in the United States say that DFS plays under state law. An open admission of the idea that DFS is playing – or even accompanying legislation who comes to this conclusion – could open the floodgates to more negative reviews.

Most legal analysts believe that DFS is passing the “Dominant factor test” that many states apply to determine whether something is playing or not. But DFS also exists in a number of states where the game definition threshold is different. And a number of those states have yet to weigh in.

Then there is also the issue with the current legal battle in other states – most important for FanDuel and DraftKings in New York, Illinois and Texas. While the DFS industry maintains that this is a courtroom game of skill, it would be frowned upon to accept being called a game elsewhere.

The FSTA has made it a priority

The Fantastic Sports Trade Association recently reiterated that obtaining the jurisdiction designation is a priority in state law.

Extract from an e-mail sent to member companies by President Paul Charchian:

I am writing to you today to inform you that the FSTA Board of Directors has voted unanimously to adopt three important pillars for our lobbying efforts.

First, we want to be clear about the association’s goals for our state-by-state legalization efforts. They are:

  • Clarification that fantasy sports competitions are legal games of skill
  • Common sense regulation
  • Pricing structures that allow small operators to remain viable in the state

This clearly shows that the industry as a whole will not allow anyone to call fantasy sports a “game” without a fight. It was in play in New Jersey on Tuesday; of Associated press article on a fantastic sports audience out there:

[Industry lobbyist AJ Sabath] said the bill as currently drafted “would create a significant level of uncertainty about the future of our industry in New Jersey.”

Sabath said without an explicit definition of everyday fantasy sports as a game of skill, the industry cannot invest in setting up operations in the state.

The “game” turns into a slippery slope

Industry would like to avoid being treated simply like regulated gambling in states, for various reasons:

  • The authorization process is more rigorous and more expensive.
  • States tax gaming revenues in addition to charging license fees (most DFS invoices only do the latter).
  • Gaming regulatory regimes are more onerous than most of the bills currently being issued.

The industry wants to distance itself from the gaming regulatory regimes in every state, a battle she already won in Virginia. In Indiana – where a bill is on the governor’s desk – fantastic sports are the responsibility of the games commission, but as a game of skill.

Even though the industry could put aside the legal implications of agreeing to being called “gambling,” the New Jersey bill serves as an example of what the DFS industry wants to avoid. by being regulated. The proposals of a 9.25% gross income tax and severe fines for breaking the law are two things the industry would be less than thrilled with.

Treating DFS like gambling may be too difficult for most operators to manage financially and from an implementation perspective, which is why the industry offers much less expensive regulations in its model legislation.

The bottom line: while everyone would just like ignore the skill versus game debate, the designation is far too important to the DFS industry as it stands today.

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