FANTASY-REALITY `SHOWDOWN'
Game might edge toward illegal betting
A new daily fantasy sports game that lets users hone in on a single NFL playoff game has some gambling experts wondering if the contest inches the industry closer to the territory of sports betting that remains illegal in most of the United States.
The “Showdown” variant offered by leading fantasy sports company DraftKings allows users to pick six athletes from two teams playing against each other in a real-life football game, racking up fantasy points based on stats such as touchdowns, receptions and yards passing, rushing or receiving. That means users playing “Showdown” this weekend can wager on performances in today’s Patriots-Titans game without having to wait for the Saints-Vikings game to play out several hours later.
But the 2006 federal law that effectively banned online gambling, while giving rise to daily fantasy sports, requires daily fantasy contests to be based on the performances of athletes in “multiple real-world” sporting events — not just single games. That detail is leading groups that oppose gambling on fantasy sports to question how DraftKings and regulators operate.
“This new game continues the industry trend of trying to get as close as possible to single game betting,” said Keith Whyte, executive director of the National Council on Problem Gambling. Whyte said the games “further blur the largely fictional line between daily fantasy sports and sports betting.”
DraftKings says the federal law — the Unlawful Internet Gambling Enforcement Act — only applies if there’s an underlying violation of state gambling statutes first, and, so far, no state has objected to the competition.
State laws vary widely, but policymakers in 18 states responded to the industry’s popularity by legalizing and regulating daily fantasy sports. Many of those regulations were developed with heavy lobbying from DraftKings and other industry leaders.
“This act is basically irrelevant. Everything defaults to state law now,” said Anthony Cabot, the company’s outside legal counsel, referring to the federal law that the industry has long cited for justifying its existence.
The Boston-based company has also offered contests for other one-off events such as NASCAR races and golf tournaments since 2015, without any complaints from regulators, he added.
Daniel Etna, a New York sports lawyer who closely follows the sports gambling industry, said the game appears to comply with most, if not all new state laws approved in recent years to legalize and regulate daily fantasy sports.