Is Fantasy Football Illegal?

As football season gets underway, so do many “fantasy” leagues. Fantasy leagues allow average, everyday fans to undertake the role of owner and general manager as they draft a team, select a roster, and watch the chaos ensue on game day. As millions of virtual managers watch their virtual team hit the field, specifically those who have paid money or bet on their team, chances are very few stop to ask an important question: Is this legal?

It may be that most assume it is, or that they are not playing for money. However, if money is involved, this question is vital.

The Unlawful Internet Gambling Enforcement Act of 2006 is legislation that greatly diminished the prevalence of online gambling. However, it also carved out an exception for fantasy sports, provided they meet three requirements:

1. Prize value is not determined by the number of participants or the value of fees
2. Winning reflects skill of participants and their knowledge of real-world statistics
3. Winning is not based on the final score of a real-world game, or the single game performance of a single real-world athlete or team.

Based on these criteria, many traditional fantasy leagues are perfectly legal under federal law.

However, as the popularity of these leagues grows, the variety and type of games also grows: where there are daily, by game payouts, or pay-to-enter “survivor pools” are concerned, the exception laid out above slowly disappears, leaving no federal protection from illegal gambling charges. In fact, any game that is not structured to meet these three requirements may in fact be violating several federal laws.

Moreover, even where fantasy football is legal under federal law, it still faces state review.

Curiously, and unnervingly, while the federal government has, subject to the definition above, deemed fantasy sports games of skill, many states define them as games as “chance.” Moreover, in some states, even if the fantasy football is acknowledged as predominantly a game of skill, it may nonetheless still be illegal if it involves any element of chance.

Even more frustrating are states where fantasy sports have not received much attention at all. For instance, in 1991, Florida’s Attorney General issued an advisory opinion (which means it has little legal authority, but is nonetheless indicative of how the state may treat something) questioning the legality of fantasy sports. Under state law, unless the fantasy sport is a game of “chance” (which would ironically make it illegal under federal law), it is a misdemeanor to wager money on the game. Fortunately, to date, Florida has yet to take any legal action against fantasy leagues or their participants. However, that may cold comfort for those who will continue to play under a constant reminder that what they are doing may one day be taken out of the grey area and deemed to be illegal.

Florida does not stand alone in opposing fantasy sports on the books. Recently, the Kansas Gaming & Racing Commission updated their website, indicating that many types of fantasy sports are most likely illegal. This update may add the Sunflower State to a shortlist where participants are forbidden from participating in the larger, “for cash” online fantasy leagues. Other states include Arizona, Louisiana, Iowa, Montana, and Washington.

As the season unfolds, participants would be wise to brush up on the laws of their state. After all, educating oneself in the legality of fantasy sports is the best way to avoid a reality check later.