Is Fantasy Sports Gambling Or A Game Of Skill?

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Thursday, August 20th, 2015 | Written by Shane Larson

Visit any fantasy sport site and you’ll notice that they always refer to their daily fantasy sports (DFS) product as being an activity based upon skill, and as such should not be considered a form of gambling. For example, DraftKings, the biggest DFS site in the world, states that “Daily fantasy sports is a skill game and is not considered gambling,” while its rival, FanDuel, explains on its website that, “All of our games are 100% legal, based on the Unlawful Internet Gambling Enforcement Act (UIGEA) that deemed fantasy sports gaming a game of skill and legal in the United States.”

The one thing the the many DFS site all have in common, though, is in not being able to provide any solid evidence as to why DFS shouldn’t be considered gambling. Needless to say, many of the sites these days are pretty happy with the current legal rulings applied to the game, and as a result there is little incentive to debate the legality of DFS in states across the US.

What Exactly Is Gambling?

If you’re looking for the definition of gambling, that may in fact vary depending on who you talk to. Typically speaking, however, gambling has three separate elements, which are: chance, consideration, and prize. Having an Unlawful Internet Gambling Enforcement Act (UIGEA) carveout, therefore, is not considered automatic proof that an activity is not a form of gambling. Both horseracing and lottery ticket sales, for instance, have received an UIGEA exemption, even though it is difficult to argue the case that these activities are in fact skill games.

Does DFS Fall Under This Category?

While fantasy sports involves a certain amount of skill, the activity also includes all three elements which provide the common definition of gambling, namely chance, consideration, and prize, with the consideration aspect best described as something of value or money, which the player will bet in the hopes of winning something of equal, or greater value.

There is a certain element of skill also involved in fantasy sport but for the most part, the player will bet a certain amount of money, and will then hope the players he chooses for his team will perform better than everybody else that his opponents chose. If the players for his team are better than everybody else’s he will win. Despite this, however, it doesn’t matter how much skill was used to choose the players, players may be substituted, they may be banned, or they may pick up injuries leaving them sidelined. This leaves fantasy sport outside of the player’s control, which is known as the chance element.

More Risk Than Poker Or Sports Betting

Though you may not think so at first, in reality, fantasy sports is actually considered more of a risk than poker. In DFS, once a player chooses his team members he is “all in”, so to speak. In poker, however, players may be dealt a poor hand and can fold, or perhaps turn over another card and see if this helps them. On top of that, poker players can also trick other players and bluff, even if they’re losing. On the other hand, with fantasy sports there is no bluffing, there is no folding, and once you’ve made your choices, that’s it, regardless of whether players under perform, are injured, or anything else. Therefore, once the game starts, all other outcomes are left purely to chance. Furthermore, with normal sports betting even though an individual player may be injured and taken off during a game, the rest of his team can still go on to win the game or cover the point spreads. The same, however, cannot be said of fantasy sports betting.

So Is DFS Gambling?

In a word, yes. OK, players who are more experienced and more skilled will probably do better than inexperienced participants, but that does not make it purely a skill-based game. Skill games are defined with skill being the predominant element, and very little luck involved. We can therefore see that Fantasy Sports is basically the exact mirror opposite. For this reason, it’s pretty clear that this is a game which is NOT predominantly based upon skill, and consequently the hugely popular industry may soon need to change the rules and regulations governing the game in order to better reflect its realities.