A flood of recent advertisements for FanDuel and DraftKings has put the issue of fantasy sports at the forefront of the public consciousness. Lawmakers and regulators have taken note as well, with some calling for hearings on the industry, and others stating their belief that DFS is not legal at all.
Most daily fantasy sites accept wagers from players inside the majority of US states, but have blocked players in five: Arizona, Louisiana, Iowa, Montana and Washington. DFS operators have self-policed in those jurisdictions due to laws in those states which are relatively clear-cut in deeming fantasy sports illegal.
Mark Edelman, an associate professor of law at Baruch College in New York, is an expert on the legality of fantasy sports. He believes that DFS sites are playing fast and loose with the law in many more states in which they currently operate.
“They block their games in five states, but there are more than five states where it’s illegal,” Edelman told USA Today. “There are a minimum seven and possibly upwards of 20 states where at least certain formats of daily fantasy sports seems to be risky.”
Louisiana’s law against DFS stems from a 1991 advisory opinion voiced by former Louisiana Assistant Attorney General Thomas A. Warner III, which stated that “a commercial fantasy sports game with prizes… violated Louisiana’s state gambling law.”
That statement led to a bill being passed in 2007 which prohibits those inside Louisiana from betting on fantasy sports. The penalty for violating the law could lead to a fine of $500 and up to six months in jail.
Edelman also highlighted the fact that a fantasy sports bill was proposed in the state, but failed.
“It is not at all surprising that Louisiana is on the troublesome list of even the companies that are willing to take the greatest amount of risk. First, because the law in Louisiana is so certain that contests involving even a modicum of chance are illegal. And second, the fact that a bill was proposed to legalize fantasy sports in Louisiana and has failed, further supports the view that these contests are intentionally meant to be illegal in the state and the state may prosecute them.”
Edelman doesn’t specify the additional states in which he believes DFS sites are operating illegally. The legalities of the industry are certainly murky, and both FanDuel and DraftKings – each worth an estimated $1 billion – have a lot to lose. But while DFS ads run on repeat on every channel, momentum is building for lawmakers to decide once and for all on which side of the law DFS sites are operating.