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Gambling In The Tri-State Area, Part 1 -- Is Your Fantasy Football League Illegal?

This year, around 33 million Americans are setting their weekly fantasy football lineups. Leagues are run amongst friends, relatives and even co-workers in their offices. However, has anyone sat down to ask whether it is legal to play fantasy football for money?

Government crackdown over the last several years has discouraged many potential gamblers from using online poker and sports betting websites. Conversely, online fantasy betting websites have exploded. But the distinction between fantasy sports and gambling is sometimes very fine.

While fantasy football has taken off during the past 5 years, fantasy sports have existed for decades. Most leagues often include entry fees and payouts to the winners. In 2006, the Unlawful Internet Gambling Enforcement Act finally established their legality, by including an exception for wagering on games of skill in which winners were not determined by the outcome of a single game, but the performance of individually selected players. So rest assured, if you take home the Shiva at the end of your season-long league, you can sleep easy knowing your winnings were earned with knowledge, skill and most importantly, the blessing of the government......as long as you report the added income, of course.

However, this distinction in the law, combined with the government crackdown on online poker and sports betting websites, has led to many gamblers playing the odds through daily fantasy football Web sites. These sites, many of which allow users to wager thousands of dollars each day on the performance of individual NFL or college players, have created an absolutely booming industry. According to the Fantasy Sports Trade Association, these daily fantasy sites are now responsible for $492 million in annual spending.

It is becoming obvious that the legal status of some of these sites is getting increasingly tenuous, as the line has been blurred between fantasy football and gambling. There is some indication that there may be a significant legal distinction between daily fantasy wagers and the season-long fantasy leagues that have been supported in the past. The legality of some sites is currently being challenged in federal courts across the nation. In fact, many of these fantasy sites are run by people who have backgrounds in online poker or sports betting. Likewise, the unlucky bounce of the football, a key player injury or unexpected weather can seem fundamentally similar to the luck associated with placing a bet with a bookmaker. Stay tuned.

Source: The New York Times: Fantasy Sports and Gambling: Line is Blurred.

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