Category Archives: Fantasy Sports

New York Fantasy Sports Legislation Might Be Subject to Lawsuits Seeking to Stop Expanded Sports Gambling

Casino Watch Focus has reported on the ongoing developments in the Daily Fantasy Sports (DFS) industry. These daily fantasy games are essentially taking the skill based game of fantasy sports that typically lasts and entire season and boiling it down to a daily gambling activity which lacks the same skill based approach as typical fantasy games. The industry was called out for being a very obvious form of illegal sports gambling at both the state and national level. Feeling the pressure, the industry has at temped to self regulate to have the appearance of safeguards for players and they have spend tons of time and money in lobbying efforts to legalize their gambling product. Each state has, however, chosen to regulate the industry in a different way, and some have defined DFS as games of skill, thus making it immune to gambling laws. One of the newest states to enter the debate is New York, and they may be facing lawsuits. The Buffalo News reports: 

A national anti-gambling group may sue to try to reverse a new law legalizing daily fantasy sports contests in New York State.

“We believe in improving the lives of New Yorkers, and part of that mission is to repeal the state’s predatory gambling policies, and litigation is part of that effort,” said Les Bernal, national director of the Washington, D.C.–based Stop Predatory Gambling.

Critics of the new law, signed by Gov. Andrew M. Cuomo two weeks ago, say the Legislature needed to go through a lengthy constitutional amendment process to legalize a new form of gambling. Instead, the bill’s sponsors relied on a statutory change that declared the fantasy sports contests to be “games of skill” instead of illegal games of chance.

The anti-gambling group Stop Predatory Gambling, isn’t the only organization that has an interest is stopping this form of gambling. There have been talks of local casino companies bringing suit. Additionally, the new legislation may very well violate the state’s exclusivity agreements with tribal groups in New York. Stop Predatory Gambling has been clear, however, that they wont partner with such groups and they have their own, more altruistic reasons for trying to protect the citizens of New York. The Buffalo News continues:

Where the money to fund the litigation by the national anti-gambling group would come from is not certain, but Bernal said his group would not partner, directly or indirectly, with any casino companies that also opposed the June legislation.

Bernal pointed to a May Siena College poll that found 45 percent of New Yorkers opposed daily fantasy sports and 37 percent supported it.

“There is no single act of New York State government that creates more inequality of opportunity than its sponsorship of predatory gambling,” Bernal said. “And now what state government is trying to do is force predatory gambling into every home and smart phone in the state as a result of a push by very powerful gambling interests.” 

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UPDATE: NFL to Cease Fantasy Football Marketing Efforts to Minors

Casino Watch Focus has reported on the unfortunate direction the NFL took regarding fantasy sports. Several non-profit organizations, including The National Council on Problem Gambling and the Campaign for a Commerical-Free Childhood, reached out to the NFL to express legitimate concerns over their marketing practices. In a letter to the Commissioner Roger Goodell, they outlined how them directly and aggressively seeking kids to participate on fantasy sports games like “NFL Rush” was promoting a culture of gambling. These games offered prizes that, according to the letter, “may encourage children to spend excessive amounts of time trying to win these prizes, thus planting the seeds of addiction.” These corruption allegations were heard by the NFL and they have stated they plan significant changes. An online source explains:  

The NFL confirmed Wednesday it has informed several advocacy groups that it will make significant changes to the game. The school curriculum based on the game has been discontinued and the league has promised it will not promote fantasy sports in schools in the future.

“We are pleased that the NFL has agreed to make these changes, and young children will no longer have a financial stake in the outcome of its games,” said Josh Golin, executive director of the Campaign for a Commercial-Free Childhood. “It is also good news for parents that the league will no longer enlist teachers and schools in an effort to get children into the habit of playing fantasy sports.”

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NBA Denies Daily Fantasy Sports Industry the Ability to Advertise on Jerseys

Casino Watch Focus has reported on the ongoing struggles of the Daily Fantasy Sports Industry to be seen as something other than sports gambling. As the critical examination of the industry has progressed, more and action has been taken to ensure safeguards from such gambling. Some states have clarified their laws to indicate DFS is gambling, and prohibited the industry from operating, some states have declared it gambling and have passed laws to regulate the industry and protect customers, and the biggest players in the industry, DraftKings and FanDuel have passed their own safeguards and regulations in hopes of limiting the negative publicity and need for individual states to ban their gambling business. On the federal level they have been investigated and Congress plans to hold hearings regarding their gambling activity. Sports organizations have also had mixed involvement, as most have operating agreements with the industry, but have starting pulling back. After recent insider trading scandals emerged it looked like the NFL was beginning to pull back on the industry and its promotions Now it looks like NBA has distanced itself as well with a newly announced jersey advertising policy. LegalSportsReport online reports: 

Daily fantasy sports sites like DraftKings and FanDuel will not be allowed to advertise on NBA jerseys, according to ESPN’s Darren Rovell. DFS a no-go for jerseys

Rovell was reporting on the parameters for allowing logos on NBA jerseys, a development that first came to light last month. NBA teams can start selling a small space on jerseys worn in games starting with the 2017-18 season.

There are restrictions on who can advertise on jerseys, however, and that appears to include DFS sites. Why not DFS on the jerseys? There was no immediate indication from the NBA or Rovell of why the league made the decision to exclude fantasy sports companies, specifically. The league also said advertising related to “gambling” would not be allowed, per Rovell.

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Congressional Committee to Take Up Daily Fantasy Sports Issue

Casino Watch Focus has reported many times on the newest form of sports gambling known as Daily Fantasy Sports. Also known as DFS, it’s an industry that very clearly represents sports gambling, and many states have either clarified their state rules to inform the industry that DFS is illegal, or have decided it represents gambling with no protection for players and they have decided to regulate the industry. The two most prominent companies involved, DraftKings and FanDuel, have even tried to proactively pass internal regulations in hopes of avoiding wide-scale government regulations. However, with the industry coming under fire from so many sources, including not only states, but also the FBI and the US Attorney general, its no surprise that Congress has decided to take a strong look at the issues at hand. An online source reports:  

A senior Democratic Energy and Commerce source has confirmed to Legal
Sports Report that the Subcommittee on Commerce, Manufacturing, and
Trade is planning a May 11 hearing on daily fantasy sports. That committee is housed within the Energy and Commerce Committee, chaired by *Fred Upton* (R-MI). *Frank Pallone* (D-NJ) is the ranking Democratic member.

There is *no active legislation* at the federal level that addresses daily fantasy sports. According to the source, the subcommittee will examine the *nature of DFS* as a product and the *current legal status* of the product. Ongoing legislative developments at the state level, consumer protection issues, and the potential role of the federal government will also be topics on the table.

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Nonprofit Groups Expose the NFL’s Strategy to use Fantasy Sports to Addict Kids to Gambling

Casino Watch Focus has reported on the National Football League’s (NFL) position on sports gambling. They have long held to the belief that keeping the NFL a very far distance from gambling is in the league’s best interest. Recently that position has come into question with the NFL’s interest in Daily Fantasy Sports (DFS). This new form of gambling has taken most of the country by storm and state after state are either calling it illegal gambling or passing legislation to heavily regulate the industry. As is often the case, those with business and gambling interests make attempts to build a gambling base in people as early as possible. It would appear, according to several Nonprofit groups, that the NFL is taking a similar approach and marketing fantasy sports to kids. ESPN explains this controversial situation: 

Nonprofit groups are calling on the National Football League to stop offering fantasy sports competitions to children because they’re concerned the games could lead some young sports fans down the path of gambling addiction.

In letters being sent to NFL commissioner Roger Goodell on Wednesday, the National Council on Problem Gambling and the Campaign for a Commercial-Free Childhood complain the NFL “aggressively marketed” a fantasy sports game on “NFL Rush,” its website and smartphone app for children, as well as on SIkids.com, Sports Illustrated’s website for children, and through an elementary school curriculum based on the contest.

The weekly “NFL Rush Fantasy” games ran throughout the football season and were open to children ages 6 to 12. Each week, an Xbox One console and Madden NFL 2016 video game was awarded to the contest’s top performer.

The two contest participants with the highest number of points at the end of the 17-week promotion also won a $5,000 check, which the league called a “scholarship,” plus a four-night trip to Hawaii to attend the Jan. 31 Pro Bowl game with up to two guests.

The NFL would claim that these are harmless games, that don’t amount to daily fantasy sports or gambling and simply offer a scholarship to help with education. The child advocacy groups believe otherwise. The New York Post provides their rationale:

Keith Whyte, executive director of the Washington, DC-based National Council on Problem Gambling, wrote in his letter to Goodell that the contests “may encourage children to spend excessive amounts of time trying to win these prizes, thus planting the seeds of addiction.”

Josh Golin, executive director of the Campaign for a Commercial-Free Childhood, a Boston-based group that opposes child-targeted marketing, called the league’s fantasy sports-based curriculum “particularly egregious.”

‘Whether or not it constitutes daily fantasy sports, there is the bigger issue that it indoctrinates young children into a potentially harmful and addictive behavior’ – David Monahan of the Campaign for a Commercial-Free Childhood

“NFL Rush Fantasy–Learn, Play, Score!” was a math and language arts program that required students to sign up for the NFL’s fantasy football game in order to access lesson materials and complete assignments.

“Educators should not be called upon to assist the NFL in promoting an activity which is potentially harmful and addictive when engaged in by children,” Golin wrote to Goodell.

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Sports Betting Once Again Pursued by New Jersey, This Time with Far Reaching Gambling Expansion Ramifications

Casino Watch Focus has reported on the ongoing efforts to expand sports gambling in area’s outside of Las Vegas, with New Jersey being the state at the forefront. Over many years they have tried several approaches to pass legislation to allow sports betting, but beyond just the opposition from the major sports leagues like the NFL, NBA, MLB and NHL, existing federal law has kept the issue at bay. The last failed attempt was legislation that essentially said New Jersey would simply not enforce the federal law, but that effort was struck down by an federal court. Now, the Third Circuit court has granted a very rare opportunity for the New Jersey law to be reexamined. ESPN explains:

New Jersey has an “incredibly rare” opportunity Wednesday to defeat the nation’s most powerful sports leagues and win the right to offer legal, Las Vegas-style sports betting. An hour long rehearing is scheduled for 11 a.m. ET Wednesday at the 3rd U.S. Circuit Court of Appeals in Philadelphia to determine whether New Jersey’s Sports Wagering Law, signed by

Governor Chris Christie in Oct. 2014, violates a 25-year-old federal law prohibiting state- sponsored sports betting. The NCAA, NFL, NBA, NHL and Major League Baseball have sued the governor to prevent it from happening. The leagues have won every step of the way, including in August, when a three-judge panel at the 3rd Circuit ruled against New Jersey in a 2-1 majority decision. But legal authorities say the 3rd Circuit’s granting of a rehearing en banc (in front of all judges) is a sign that Wednesday may be New Jersey’s best shot of the entire saga. Since March 2010, the Third Circuit has granted a rehearing en banc just 19 times.

The impact of this particular case won’t simply impact New Jersey. Many states have interest in sports betting expansion. Additionally, there are potential Daily Fantasy Sport implications as well. ESPN continues:

Legal experts say the decision is extremely close. The outcome will have widespread ramifications in other states. Last week, Pennsylvania passed a resolution asking Congress to repeal PASPA, and several states have considered sports betting bills that would put them in position to offer sports betting should the federal statute be repealed. The ruling also could have an impact on the ongoing legal controversy surrounding daily fantasy sports. Several state attorneys general have stated that daily fantasy is a form of sports gambling. Some states are attempting to pass legislation that creates a licensing scheme for daily fantasy sports. The NBA, NHL and MLB all own equity in daily fantasy sports sites, and 28 NFL teams have advertising deals with daily fantasy companies. “Once daily fantasy sports are deemed to be a type of gambling, then I don’t know how you reconcile that with PASPA,” said Dan Etna, a co-chair of New York firm Herrick’s Sports Law Group, who has tracked the New Jersey case and daily fantasy sports.

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Recent Negative Rulings Force Daily Fantasy Sports Companies to Massively Increase Lobbying Efforts

Casino Watch Focus has reported on the ongoing criticism and identification of Daily Fantasy Sports (DFS) as the newest wave of sports gambling. Various states have been investigating DraftKings and FanDuel to determine if they are offering online gambling. Even the FBI and US Attorney General have been investigating. The DFS has tried to take a proactive approach. Recentlythe DFS industry called for government regulations and offered problem gambling safeguards. The industry believes if they can get it regulated, then that will prevent an outright ban, given online sports betting is illegal in almost all jurisdictions outside of Las Vegas. Unfortunately for DFS, more and more states are ruling that they are illegal. Now, they are aggressively changing their strategy and attempting to lobby for each state to exempt DFS from gambling laws so they can stay in business. USA Today reports:

Fighting for its life from coast to coast, the daily fantasy sports industry has dramatically changed its survival strategy since last year.

The industry now has about 75 lobbyists in more than 30 states, up from two lobbyists in two states last February, said Jeremy Kudon, an attorney for the industry. The goal is simple: If existing state laws indicate that your business might be illegal, then hire some professionals to help change those laws.

“This is a battle that’s going to be won in 50 states,” said Paul Charchian, president of the Fantasy Sports Trade Association, which advocates for the industry. “It’s going to be 50 small battles, not one big battle.” 

Its unclear how successful this strategy will be for DFS. They have started lobbying at the Federal level as well, but that could still leave individual states with the ability to clarify that the activity is illegal gambling. In their efforts at both levels, they believe they can prove that their games are games of skill not chance, but the skill level diminishes severely when new teams are drafted each day and not carried out through an entire sports season. Typically however, when a company puts forth enough lobbyist and lobbying dollars, change happens in those companies favor. But as the USA Today article explains, they have lobbied various states in the past to no avail:

The argument over daily fantasy’s legality hinges upon whether it’s considered a game of skill or a game of chance. Generally speaking, games that involve chance are usually considered gambling. But states hold different standards for how much chance is needed for a game to be illegal gambling.

While the industry started lobbying the federal government this year, it can exert more policy influence at the state level, said Marc Edelman, an associate professor of law at Baruch College, who consults in fantasy sports law. If federal lawmakers explicitly decriminalized daily fantasy, state governments could still impose stricter rules, he said.

Attorneys general in New York, Illinois and most recently Texas have argued that paid daily fantasy contests are illegal gambling under state law. Disclosures show the industry lobbied last year not only in those states but also others that could become legal battlegrounds.

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Daily Fantasy Sports Companies May Lose First NFL Team Partnership Amid Insider Trading Scandal and Illegal Gambling Label

Casino Watch Focus has reported on the ongoing issues running ramped through the daily fantasy sports industry including a Class Action lawsuit, federal investigations by the FBI and US Attorney General, and numerous state actions including a Nevada shut down of DFS and general investigations by state attorney general offices as well. Now it would appear that all the negative press is leading one NFL team, the Dolphins, who reside in Florida, a state that is already believed to be leaning toward viewing the industry a violation of state law, to potentially end their partnership with DFS companies like FanDuel and Draft Kings. It only takes one team to back out to create a chain of owners doing the same in efforts to distance themselves with what is inevitably coming. The Sporting News explains:

The Dolphins on Thursday became the first NFL team to comment on the developments. “We would need to consider all of our options, including termination, if their business model is deemed to be unlawful,” the team said in a statement, via the Boston Globe.

Officials across the country have begun to assess whether the daily fantasy sports trade model complies with state and federal gambling laws since the scandal erupted.

 Laws in Florida are especially stringent and could force the Dolphins’ hand sooner than other teams. U.S. attorney’s offices in Boston and New York — where the companies are headquartered — were already probing DraftKings over the scandal.

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FBI and US Attorney General Investigation Daily Fantasy Sports Industry

Casino Watch Focus has reported on the new insider trading scandal against the Daily Fantasy Sports (DFS) industry and has reported the constant scrutiny of the business being nothing more that sports gambling. As more and more exposure is coming to light, it appears the DFS industry has caught the ire of both the FBI and the United States Attorney General. Both have launched full-scale investigations in the business. As The Wall Street Journal explains, the FBI is looking into the matter of fantasy sports being games of skill or not:

The U.S. Justice Department and the Federal Bureau of Investigation are probing whether the business model of daily fantasy-sports operators violates federal law, according to people familiar with the matter.

The probe is in the preliminary stage, two people said. It is part of an ongoing discussion within the Justice Department about the legality of daily fantasy sites, in which customers pay entry fees to draft virtual sports teams that compete against each other for prize money based on the real-world performances of athletes. Congress in 2006 prohibited financial companies from transferring money to online gambling sites and several were shut down. But so-called games of skill were exempted. The Justice Department is trying to determine whether daily fantasy games are a form of gambling that falls outside the purview of the exemption.

Additionally, the US Attorney General is investigating the allegations of insider trading and the legality of the fantasy sports as defined by the Illegal Gambling Business Act. As previously reported by Casino Watch, insider trading type information was used by a company employee to win $350,000. Those allegations along with class action lawsuits has prompted State Department Action. An online source explains:

Whether or not operators of daily fantasy sports (DFS) are violating the Illegal Gambling Business Act (IGBA) is a question for a grand jury, which has been convened by the US Attorney’s office in Tampa, Florida to investigate the matter.

Late Friday, well-known gambling and sports law attorney with Becker & Poliakoff, a Fort Lauderdale law firm, Daniel Wallach, broke the news that has rocked the fantasy sports industry, in what has undoubtedly been the single worst week in the history of daily fantasy sports.

On Thursday a class action lawsuit was filed in a Manhattan federal court against FanDuel and DraftKings stemming from the recent revelation by both companies that their employees were allowed to participate in contests on each other’s sites for the same cash prizes available to the general population. Meanwhile, Yahoo has joined the other DFS operators and has prohibited its employees from participating in real-money DFS tournaments at rival sites.

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Daily Fantasy Sports Insider Trading Scandal Puts More Negative Light on the Gambling Nature of this New Business

Casino Watch Focus has reported on the recent developments and almost wide spread realization that the Daily Fantasy Sports business is nothing more that sports gambling. These daily games are very different from their traditional season-long counter part. The argument of skill, doesn’t hold up when gamblers can pick a new lineup each day and all the gamblers have access to the same sports player as everyone else, just like with horse betting, but unlike season long fantasy sports where once a player is drafted, they are no longer available. As the advertisements of major companies FanDuel and DraftKings will tell you, its often important to know which outlying players could outperform those commonly selected main stars. As they point out, if you can play those sleeper players, you could win big. That understanding makes the recent scandal all the more damaging, as its been alleged that employees of FanDuel and DraftKings were using insider data based on who their customers were drafting and using that information to play on the competitors websites.   The New York Times broke the story: 

A major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses’ integrity after what amounted to allegations of insider trading, that employees were placing bets using information not generally available to the public.

The statements were released after an employee at DraftKings, one of the two major companies, admitted last week to inadvertently releasing data before the start of the third week of N.F.L. games. The employee, a midlevel content manager, won $350,000 at a rival site, FanDuel, that same week.

“It is absolutely akin to insider trading,” said Daniel Wallach, a sports and gambling lawyer at Becker & Poliakoff in Fort Lauderdale, Fla. “It gives that person a distinct edge in a contest.”

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Daily Fantasy Sports Violate Florida Law

Casino Watch Focus has reported on the ongoing evolution of how daily fantasy sports (DFS) is being viewed as gambling. It was last reported that companies like Draft Kings and FanDuel are starting to lobby in Florida in hopes of ensuring DFS stays legal on both federal and state levels. It appears that as of now, federal law could be interpreted to say DFS are legal. However, Florida law would seem to indicate its illegal, and that is where major players in the DFS industry physically reside. A local NBC news affiliate reports:

If you play fantasy football in Florida, you may be breaking the law as it may be considered gambling. At the federal level, fantasy football is legal, but Florida law considers it illegal to wagers under contest of skill.

Attorney Robson Powers said the sport could qualify as gambling based on how you argue contest of skill.Attorney General Bob Butterworth found fantasy football was in violation of Florida statutes in 1991. Not much has changed since then as his opinion hasn’t been enforced in nearly a decade.

“I think people should know there is a potential to be prosecuted for this type of activity and that just because everybody else is doing it doesn’t make it legal,” said Powers.

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