The Legality of Fantasy Sports and Gambling

Fantasy Sports and Gambling: What Is the Legal Status?

Fantasy sports have become a seriously big deal. In 2021, 8 million players from all over the world participated in the Fantasy Premier League – selecting a squad of English Premier League footballers based on their statistics and past performances and then pitting that squad against those of other players. But even this figure is dwarfed by fantasy sports in the North American market. In 2019, 45.9 million American adults were participating in a fantasy league of some kind. These leagues add even more fun and excitement for individuals as they engage with their favourite sports.

But what about fantasy sports betting? Can digital competitions like fantasy baseball and football contribute to the gambling market? This should be a simple question, but, in fact, the landscape is complex.

Differentiating Between Games of Skill and Games of Chance

In locations such as the USA, it is perfectly legal to monetize your skill or expertise. This happens all over the professional world – from talented artists who make money from commissioned portraits to legal experts who provide advice and consultation for a fee. 

Under the United States federal system, fantasy sports are considered to be games of skill, not chance. Participants need to have a genuine knowledge of their chosen sport, so their activities do not fall under gambling legislation. However, the laws of some individual states do not adhere to this approach.

Gray Areas When It Comes to Legislation

Participants may find themselves falling foul of gray areas in legislation, particularly if their fantasy sports betting results in significant winnings. In the United States, individual states may retain the right to confiscate these winnings and even prosecute the player further.

Outside the USA, players may encounter other areas of uncertainty. For example, Germany also operates a federal system, and licensed gambling is only permitted in one state within the federation. Those players enjoying fantasy football or fantasy baseball gambling may be able to continue to do so, as this is generally permitted. However, totes and organized betting syndicates will not be permitted. Participants in these events may be prosecuted.

A Developing Situation

Participation in fantasy sports has grown enormously in the past three decades. In 1988, there were around 500,000 fantasy sports players across the United States and Canada. Only a few years later, in the early ’90s, this had doubled to 1 million players – a figure that would triple again by 1994. 

In 2017, there were 59.3 million fantasy sports players across these two markets. This represents an enormous rate of growth, fuelled by the emergence of the digital economy. As increasing numbers of individuals gain access to mobile smartphone and tablet devices, engagement in fantasy sports went through the roof.

Currently, the legal uncertainty around fantasy sports gambling represents a missed opportunity. With such a huge audience already invested in the excitement of fantasy sports gameplay, legal clarity could result in significant revenue for gambling providers and government authorities alike.

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