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Exploring the Legality of the Lucrative World of Fantasy Sports

INTRODUCTION "If you bet on a horse, that's gambling. If you bet that you can make three spades, that's entertainment. If you bet cotton will go up three points, that's business. See the difference?" Blackie Sherrod, legendary Texas Sports Columnist Contrary to popular belief, Fantasy Football was not the first fantasy sport to be played. The first modern fantasy sport to be played was Fantasy Baseball, invented by a group of journalists who wanted to test each other's knowledge of sports in 1980. The league came to be called "The Rotisserie," and employed the same basic principles that comprise leagues today: a league commissioner, a group of participants (players), team names, the drafting of players, and a statistical scoring system. The basic principle behind the league was to create a system to gauge players' sports knowledge throughout the season. This league circulated throughout late 1980s via regional newspapers such as the L.A. Times, N.Y. Daily News and Chicago SunTimes, prompting readers to create their own fantasy leagues (Holleman, 2006). Through the Internet in the nineties, fantasy players were able to create leagues through online providers, further growing the industry. While the rules of fantasy leagues can vary greatly, participants (players) generally are set up through an online provider via a league commissioner. Participants join the league and a draft is held prior to the commencement of the season. A league usually has anywhere from eight to sixteen teams. Typically, in season long fantasy, players will be assigned a draft pick and this will determine their order of choosing players. Teams then play each other head to head throughout the season. Each week they submit their starting lineups, strategizing on what players to select for the week based on various factors: what team they are playing, the weather, injury status, etc. Each week the winner is determined by a scoring system that is determined by the player's performances for that week. Towards the end of the fantasy season, the top winning teams then go to a series of playoff games of single elimination. The winner of this playoff series is crowned the league champion. Today, there is nearly a fantasy league for most every sport--football, basketball, stock car racing, golf, hockey, and more. Fantasy sports continue to grow yearly and people are spending more and more time playing. The growth of the industry has given way to additional services that players can use to gain an edge. Players can now insure their players through fantasyplayerprotect.com, give the league's prize money to leaguesafe.com for safekeeping, and seek advice from rotowire.com. If there's a dispute, no problem. Go to Sportsjudge.com "Where Fantasy League Disputes are Resolved" by real lawyers. FX has even created a comedy called The League that follows a group of friends throughout their fantasy season. To keep things competitive, 46.9% of Fantasy Sports players pay league fees according to the Fantasy Sports Trade Association. For Fantasy Sports, the idea that the winner of a fantasy league will be the one with the most knowledge of sports gives credence to the idea that Fantasy Sports is a game of strategy, not a game of luck; this perspective is also why current regulations in many states allow placing wagers in leagues as long as certain conditions are met. Over the years, fantasy sports have continued to evolve, with the largest growth coming lately from daily fantasy leagues. The most popular providers, "FanDuel" and "DraftKings" are revolutionizing fantasy sports. Unlike traditional fantasy leagues, daily leagues last a day or a week. They offer the same sports as traditional fantasy leagues, but are governed by different rules. Rather than a typical draft where each player has to wait their turn to draft a player, in daily leagues you choose players based on a salary cap, allowing multiple participants in the league to have the same player. …