It is no secret that daily fantasy sports in the United States are nothing, but a thinly veiled excuse to circumvent the law banning sports gambling. The Americans are not permitted to gamble on sports by federal law, but they are permitted to take part in daily fantasy sports, which looks exactly like gambling!
The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 was passed in order to protect sports from the supposed ill effects of gambling, but daily fantasy sports companies are using this law to pretend that they are conducting legal activities. The hypocrisy of the situation has not escaped the attention of the congressman, Jim Leach, who had a role to play in creating this law.
According to the former Iowa Republican Congressman, it is nothing, but sheer chutzpah when companies like DraftKings and FanDuel offer gambling services saying that the law gives them the right to do so. In fact, Leach goes so far as to say that he and other lawmakers were absolutely unaware that daily fantasy sports would become the hub of legal daily betting in the United States, attracting billions of dollars worth of wagers.
The position taken by daily fantasy sports companies is that they are immune to any state and federal laws apart from the UIGEA, and that there is no other law that can limit their activities. Federal law does exempt these companies from a specific law enforcement mechanism concerning compliance, but it certainly does not give them a legal basis for operating. The 2006 law was brought into effect in order to close down poker and gambling websites by preventing their funds from being processed by financial institutions. Since the law did not define internet gambling very clearly, companies such as DraftKings and FanDuel have an ambiguous space in which they operate.
A vast majority of the states in the US do not have any specific laws banning fantasy sports contests, even though they have legislations against sports betting and certain forms of gambling using the internet. Fantasy sports companies such as FanDuel and DraftKings also use a loophole in the law that permits games of skills and not of chance; these companies claim that fantasy sports are skill-based games even though the fact is that people win or lose depending on an athlete’s performance on the field. This sounds suspiciously like sports gambling, and it underlines the falseness of the situation, especially since it attracts so much money.
Fantasy sports betting has been attracting a lot of negative attention of late, and things came to a head the previous week when an employee of DraftKings won $350,000 on FanDuel by making use of information that was not available to the public at large. The industry has been taking on a very high profile in the world of sports and it is very hard to miss advertisements from these companies on radio, television and the internet. In fact, a few NFL teams have entered into marketing tie-ups with these companies and Major League Baseball is closely associated with DraftKings.