Why Daily Fantasy Football Is Illegal On Super Bowl Sunday

Posted: Jan 23 2014, 2:21am CST | by , Updated: Jan 23 2014, 2:26am CST, in Super Bowl


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Why Daily Fantasy Football Is Illegal On Super Bowl Sunday

The daily fantasy football industry is rapidly expanding, with its largest websites now advertising their contests on television stations such as ESPN.

However despite the hobby’s recent proliferation, daily fantasy football will need to take a ‘bye’ on Super Bowl Sunday.

The legal problem with running a daily fantasy football contest on Super Bowl Sunday stems from the unique nature of the ‘fantasy sports carve-out’ to the Unlawful Internet Gambling Enforcement Act of 2006.

The Unlawful Internet Gambling Enforcement Act (“UIGEA”) makes it illegal for any company “engaged in the business of betting or wagering” to “knowingly accept” funds “in connection with the participation of another person in unlawful Internet gambling.”

While the UIEGEA includes an explicit carve-out for some fantasy sports games, this carve-out only applies to games that meet three criteria:

(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.

(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

(III) No winning outcome is based—

(aa) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or

(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.

Because the NFL only plays one game on Super Bowl Sunday (that, of course, being the Super Bowl), any daily fantasy football contest held on that Super Bowl Sunday would fail the second prong of this carve-out because the contest would not be based on “multiple real-world” events.

As a result, any interstate version of daily fantasy football involving both an entry fee and cash prize would face high legal risk under federal law, as well as under state law.

Marc Edelman is an Associate Professor of Law at the City University of New York’s Baruch College, Zicklin School of Business, where he has published more than 25 law review articles on sports law matters, including “A Short Treatise on Fantasy Sports and the Law.”

In addition, he is an adjunct professor at Fordham Law School, and a legal consultant on sports, antitrust, gaming and intellectual property matters. Nothing contained in this article should be construed as legal advice.

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Source: Forbes

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