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Any Given Sunday: It’s Fantasy Football Season, But is it Legal?

 Posted on October 17, 2014 in Fantasy Football

fantasy football legal, Kane County lawyersMoments like these make football popular, and it’s little wonder that so many people want to take a piece of the game home with them through fantasy football leagues, whether or not Roger Goodell is flashing his trademark smile.

Fantasy football is not just a hobby for a few rabid fans who paint their faces and show up early for Sunday tailgating. It’s a huge industry that’s worth up to $70 billion a year, and hundreds of thousands of players scour the Internet in the hours leading up to game day, looking for injury reports, predicting match ups, talking smack with other players, and generally trying to do anything to get an edge.

Fantasy Sports Leagues

Many of our clients ask whether or not fantasy sports leagues are legal. To answer this question, we need to shift gears for a moment. From a certain perspective, fantasy sports leagues are interstate gambling. Players pay a fee to be eligible for prizes at the end of the season. But don’t go away yet, because we’re just getting started.

The federal Unlawful Internet Gambling Enforcement Act of 2006 has an exception for these leagues, but individual states have the final call as to whether or not these leagues are legal. Recently, an Illinois federal judge dismissed a lawsuit which alleged that the defendant, Fan Duel, Inc., was running an illegal gambling operation. The lawsuit was dismissed on procedural grounds, so the court did not rule on the merits of the suit. More litigation may follow.

If the courts do decide that the UIGEA exception is inapplicable in Chicago, many fantasy sports leagues may be vulnerable to prosecution. The elements of an illegal internet gambling operation are:

  • A person,
  • Engaged in the business of wagering,
  • Knowingly accepts,
  • Over the Internet, and
  • Any payment or similar financial consideration.

All of these elements are relatively straightforward, with the exception of the second element. To be “engaged in the business of wagering” the majority of an entity’s revenue must be from these activities. The nature of fantasy sports leagues poses another question. Are fantasy owners paying an entry fee in the hopes of winning prize money, or are they paying for the privilege of connecting with other fantasy owners and enjoying this aspect of the game?

So now, in the immortal words of Hank Williams Jr., are you ready for some football?

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