Fantasy sports under legal microscope in NC

— More than 1 in 10 Americans play fantasy sports, spending an average of $465 a year, according to the Fantasy Sports Trade Association. In total, fantasy sports is a $26 billion industry.

With the explosive growth, fantasy sports are under the legal microscope across the country, including in North Carolina.

Federal law says fantasy sports are legal, but that hasn’t stopped some states from pulling the plug. Fantasy football is banned in five states – Arizona, Iowa, Louisiana, Montana and Washington. Recently, Nevada and New York deemed daily fantasy sports to be gambling.

Two questions determine whether fantasy sports are legal here. First, is it a game of skill or chance? Second, is the entrance fee a fee or a wager?

Jermaine Thomas, of Raleigh, is one of the estimated 50 million Americans who play fantasy sports.


“I said, I’ll try it. There’s no harm in trying it. Once I tried it, the rest is history,” he said. “I usually spend about 30 minutes a day researching and what lineup I’m going with I the NBA.”

Thomas said he questioned whether it was legal, so he did some research first.
The federal Unlawful Internet Gambling Enforcement Act makes any online bet or wager illegal, except when it comes to fantasy sports. The courts say money exchanged in fantasy football is participation fees and prizes, not wagers and winnings.

The debate over legality gets more interesting on the state level.

Attorney Christy Dupriest is part of the Womble Caryle law firm in Washington, D.C. As a law student at the University of North Carolina at Chapel Hill in 2006, she wrote a research paper that's still largely cited in the fantasy sports debate over skill, which makes a game legal, versus chance, which is deemed illegal gambling.

“The elements of skill dominate over the elements of chance that are involved,” she said. “The single-week games have a lot of skill. I think you see that because it’s a small percentage of the players that win most of the games.”

Rotoworld, a fantasy football tracking website, produced stats to back that up. The top 10 fantasy players win an average of 873 times a day. The remaining 20,000 players who were tracked won just 13 times per day combined.

In the weeks leading up to the NFL season, the top two fantasy companies, FanDuel and DraftKings, spent more than $100 million on ads, according to
Adam Gold co-hosts Adam and Joe on 99.9 FM The Fan, where both FanDuel and Draft Kings have advertised.
“Fantasy football is gambling. The daily fantasy is very much gambling,” he said. “Fantasy sports has kind of overtaken sports.”
Gold says he thinks state and federal government should face the tidal wave of fantasy interest with regulation and taxation.
“This will maybe lead to a place we should have gone to anyway, which is nationwide sports wagering,” he said.
Despite the long odds to win the big prize, Dupriest says federal law doesn't see fantasy football as gambling, and she doesn't see the law changing any time soon.
“One of the main public policy reasons that gambling is something that’s been heavily regulated or outlawed entirely is the social ills that it can cause,” Dupriest said.
Thomas said he sees the difference between fantasy football and traditional gambling like the lottery, casino games, even video poker. He says knowledge can make you a draft king.

“Me, personally, when I get low on my balance, I really cut it off for a while,” Thomas said. “I know it’s a long shot that I’m going to get up to what the commercial says. More so, it’s more about having fun playing.”

In a recent court ruling in North Carolina, the courts recognized skill in poker but determined chance in any given hand was still an overriding factor. If that ruling is interpreted in terms of fantasy sports, skill would prevail in a fantasy season, whereas daily fantasy is more impacted by chance.

When asked about fantasy sports, North Carolina Attorney General Roy Cooper said his office will only get involved if a district attorney asks for guidance as to whether it's illegal gambling.

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