It has come to national light that fantasy sports sites, such as DraftKings and FanDuel, aren’t regulated by the federal government like online poker or sports betting.
Recent moves by lawmakers and the FBI raise the question: is fantasy sports gambling and, if it is, how should it be regulated? The Editorial Board says it is gambling but questions how we regulate gambling in the first place.
Congress passed legislation in 2006 that outlawed online poker and online sports betting, according to the New York Times. This legislation also made a provision for fantasy sports to be classified as “games of skill.”
However, in early October, scandal erupted when a midlevel manager of DraftKings won $350,000 on FanDuel, leading to allegations of insider trading, passing on proprietary information and predatory tactics. The FBI, as well as the New York state attorney general, have opened investigations into the matter.
Though the question of whether or not employees of these companies have access to information that would give them a leg up while playing fantasy sports deserves a valid investigation, the Editorial Board believes it’s obvious fantasy sport sites are gambling.
Skills such as statistical analysis and a deep knowledge of the teams and players are vital to success at fantasy sports. However, the exact performance of players and unforeseen accidents are impossible to predict, which makes these games largely based on luck.
A variety of gambling games such as poker and blackjack also require skill, but are still considered gambling due to the uncertain outcome of the results. If it’s gambling — which it is — the government can and should regulate it, as it does with other forms of gambling.
There are hundreds of people helping the development of this multi-billion-dollar industry on these sites. According to Yahoo Finance, winnings on fantasy sports should be self-reported as additional income, though most participants might not be following this suggestion from the IRS.
Lotteries, on the other hand, are notorious for the amount of taxes the federal government collects. There should be consistency in how our government treats online and sports gambling across all of their various forms.
That isn’t to say the ways in which gambling is regulated in the United States aren’t often arbitrary and outrageous. Citing moral or ethical reasons — as well as ties to organized crime — local, state and the federal government have historically regulated gambling until they were in need of the revenue it creates.
Indiana had a constitutional amendment prohibiting lotteries, which, until 1988, was more broadly interpreted by the courts to include all forms of gambling. Since then, casinos in Indiana consist of riverboat casinos, one land-based casino and two “racinos,” which are combination horse tracks and casinos.
Furthermore, those who are in support of banning fantasy sports often have a highly vested interest in seeing their demise. Take for instance Sheldon Adelson, the billionaire most famous for his investments in Las Vegas casinos, who in 2011 stated that “I am willing to spend whatever it takes (to stop online gambling),” according to Newsweek.
Adelson has also said that he is “morally opposed” to online gambling on Bloomberg Television’s “Money Moves With Deirdre Bolton” in 2013.
He has also historically been one of the Republican Party’s largest donors, one of the first donors that 2016 GOP presidential candidate’s went to for support.
According to Time.com, four Republican candidates — former Florida Gov. Jeb Bush, New Jersey Gov. Chris Christie, Wisconsin Gov. Scott Walker and Ohio Gov. John Kasich — gathered “at Adelson’s Venetian hotel and casino on the strip to address a gathering of the influential Republican Jewish Coalition, a group backed by Adelson,” in 2014.
All he is really opposed to is his bottom line, which has been cut into significantly due to online gambling, and he wants support from those in the highest places of power to stop it.
Are fantasy sports gambling? Yes. Should it be illegal? Debatable.
