Daily Fantasy Sports Leagues – 100% Legal In The United States

Fantasy sports betting isn’t new – fantasy owners in private leagues have no doubt been laying real cash wagers on the outcome of the game since the 1950s, when the first rudimentary fantasy sport (based on golf) was played. What’s new is the existence of mobile and Web-based platforms for fantasy sports betting. Also new, so-called DFS or Daily Fantasy Sports games which turn a contest that’s usually an entire sports season long into a 24-hour competition that has huge prize payouts.  As a matter of fact, the 2 legal fantasy sites we recommend to players both offer 1 million to first place every single week during football season.  Actually Draft Kings has a 10 million guaranteed tournament the first week of NFL.  That’s life changing money, so anyone who knows their way around fantasy sports should really sign up and take a shot.

Fantasy Sports Has Already Become A Multi-Billion Dollar Industry

An estimated 40 million fans of American pro sports participate in fantasy games each year, a huge market that’s ripe for innovation. Of that 40 million, some 2% are currently signed up to play DFS and other cash-based fantasy games on one of the two biggest DFS and cash betting fantasy platforms available today. Already, these services are paying out big bucks, a total of around $1 billion in 2014 and over 2 billion expected in 2015.  The 2 big names are paying out over 100 million a week in cash prizes during football season.

Venture capitalists (some of them big names in the industry) are racing to stuff cash into the pockets of the owners and operators of FanDuel and DraftKings, the two biggest names in DFS and fantasy sports cash betting. Similar to the early days of online casino and poker play, the name of the game for these two competitors (and the start-ups nipping at their heels) is acquiring massive amounts of customers through advertising and marketing, then keeping them there with promotions, contests, and innovative design and features.

For now, the number of fantasy leagues and games that don’t involve real-money wagers so far outpaces the number of those that do, it may be difficult to imagine placing cash bets on a hobby that for decades has been primarily played for free. The rapid acceptance of services like FanDuel and DraftKings by professional leagues (MLB and NBC Sports both see DFS and fantasy-for-cash as a way to increase their audience) is proof that there is a market hungry for this sort of fantasy interaction.

Put simply, these new forms of fantasy are good for multiple industries. New markets that involve cash bets are rare and likely to be very lucrative. But the interesting wrinkle with fantasy betting is that it appears to be welcomed by professional sports, unlike sports gambling in decades past. As the pro leagues see it, increased interest in the fantasy version of a sport increases the fan’s overall interaction with the sport. That interest trickles up, so to speak, and becomes revenue for the league and teams involved, from increased ticket and merchandise sales.

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The Legality of Playing Fantasy Sports For Real Money

Is Playing Fantasy Sports For Real Money Legal In The United States?

Both FanDuel and DraftKings operate openly in the United States. Since both of these platforms involve real-money betting, it may surprise some people familiar with American gaming law that these services operate well within legal boundaries. In fact, DFS and cash fantasy start-ups are being funded by the biggest names in the VC industry and are becoming widely accepted by professional sports leagues.

In the United States, the biggest hurdle for cash betting services is the UIGEA, a bill passed in 2006 that made headlines as the cause of the collapse of the US online poker market. The UIGEA prevents financial institutions (banks and credit card companies) from allowing Americans to make transactions with known gambling sites, but it provides a crucial exception in the case of DFS and fantasy betting.

According to the UIGEA, a cash wager is legal if the outcome “. . . reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events.”

In short, skill-based games are okay, and in particular, fantasy sports wagers are okay if they are determined based on hard statistical data. DFS is both a skill-based game and based on a statistical outcome. Some make an argument that the draft or auction used to determine a player’s fantasy roster is a skill element. While it is true that luck plays a role in the draft, any fantasy owner will tell you that fantasy drafts and auctions require as much skill or maybe more skill than lining up rosters for head-to-head competition.

So far, support and funding for sites like FanDuel and DraftKings has come from major players (the NBC Sports and MLB support mentioned earlier), which is an indication that the industry as a whole sees this as a fully-legal contest of skill. The luck element involved in a fantasy draft is no different from the luck element involved in the deal of a poker hand – there is no indication whatsoever that the federal government is interested in shutting down DFS and fantasy cash betting services using the UIGEA or the more antiquated 1961 Wire Act.

Daily Fantasy Football Leagues

The earliest fantasy football league formed in 1963. Though football is the most popular fantasy sport today, that hasn’t always been the case. The first rotisserie-style leagues didn’t appear until the mid-80s, some three decades after roto leagues for sports like golf and baseball began. Now, football-based fantasy games are so prevalent, reports each year estimate the cost to businesses from loss of productivity due to fantasy football in the billions of dollars. As the most popular fantasy sport, football is an early contender for most popular DFS and cash fantasy leagues as well, even though other sports’ schedules fit in better with the DFS mode of fantasy competition. Legal Fantasy Football Leagues

Daily Fantasy Baseball Leagues

Not the first fantasy sport in history – that honor goes to golf – but baseball was the first to catch on in a big way, and many of the traditions and rules used for other fantasy contests evolved from early rotisserie-style baseball leagues. Baseball is one of the most statistically-dense sports available, which makes it a prime target for fantasy fans. A sport like baseball, in which games take place throughout a given week and aren’t concentrated on specific days like football, requires a different approach by DFS services. In some ways, baseball is more suited to micro-fantasy contests like DFS, in that members can play basically every day of the week. Legal Fantasy Baseball Leagues

Daily Fantasy Basketball Leagues

Another fantasy sport that benefits in some ways from less-formal scheduling is basketball – similar in many ways to baseball, fantasy basketball is catching on among American sports fans as the sport itself gains in popularity. Basketball teams have a relatively small roster, which makes the fantasy version of the game more competitive and a bit easier to research. Legal Fantasy Basketball Leagues

Daily Fantasy Hockey Leagues

This sport, slow to catch on in some parts of the American sports market, was also one of the last pro US sports to be used as the basis of a fantasy contest. Like basketball and baseball, hockey represents a potentially lucrative market for cash-betting fantasy platforms, thanks to the availability of games all week long. With the modern NHL reporting record revenues in the billions, TV viewership up 11 points from just five years ago, and increased interest in international contests, hockey is a sport on the rise, and a potentially big market for fantasy cash betting platforms. Legal Fantasy Hockey Leagues

Daily Fantasy Golf Leagues

The sport that inspired the world’s first fantasy leagues is now a small player in the worldwide fantasy stage. The simplicity of fantasy golf comes from the fact that it’s a sport played by individuals rather than players on a team. Fantasy golf rosters are easier to maintain, post-draft, than rosters based on other sports. The fantasy version is alive and well – just look to the organized versions of the game available through popular fantasy services like Yahoo and ESPN for proof. But there is not nearly the fan interest in this sport that there is for fantasy football, baseball, or even basketball and hockey. Still, lovers of golf (and lovers of fantasy competition) appreciate it for its purity and for the weekly head-to-head competition, so regular a fan could set his watch by it. Legal Fantasy Golf Leagues

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