Post
by Rog » Tue Nov 24, 2015 2:51 pm
As per somebody else's writing /this is what is being weighed
Battle in the Big Apple: New York Attorney General vs. DraftKings
12
By spensurf06, Last Updated 49 seconds ago
Editor’s Note: Spencer Payne is a litigation attorney in Florida following the legal developments in the DFS industry.
By now, most DFS players have heard about the New York Attorney General’s attempts to declare DFS illegal in New York. The dispute centers on whether DFS games are games of skill or chance. On November 25, a New York judge will be asked to decide. These are the arguments he will hear.
The Attorney General:
First, the AG contends that DFS games involve an element of chance “to a material degree” and thereby violate New York’s anti-gambling laws. In his Complaint to the Court, he likens a DFS lineup to a prop bet parlay wherein one can bet on a number of individual players’ in-game statistics. He also points to statement by a “CEO of one DFS company” that DFS games are like “a sports betting parlay on steroids.”
Second, the AG will argue that unlike season-long, DFS involve chance to a material degree. For support, he points to the long-term strategy involved in a competitive draft and the ability to trade, add, drop, and bench players in the event of injury, suspensions, or “other unpredictable occurrences” throughout the course of a season—all of which are allegedly absent from DFS.
Third, the AG will ask the Court to consider how other states have viewed DFS. For example, the Washing State Gambling Commission applied the same gambling laws as in New York and declared DFS illegal. He will also argue various industry leaders have publicly compared DFS to gambling. For example, he quotes DraftKings CEO, Jason Robbins, as saying in a reddit thread that DraftKings operates in the “gambling space.” He also points to a fantasy trade association presentation comparing the DFS market size to that of other forms of gambling (sports wagering, lotteries, and online poker).
Last, the AG will argue certain characteristics of DFS—quick rate of play, large bets and large payouts, and the perception of skill as a determinant of outcome—has and will lead to increased gambling addiction. In his Complaint, he cites two experts on the matter and customer inquiries to DraftKings with subjects like “Please cancel account. I have a gambling problem.”
DraftKings:
DraftKings’ overall position is that success in DFS is controlled by one’s skill in “accurately projecting the performance of individual athletes and strategically assembling individual athletes into optimal lineups given the constraints of the salary cap.” And rather than placing bets on a binary event outside their control, DFS players pay an entry fee to a contest in which they compete by selecting lineups that determine the winners and losers.
DraftKings will point to a number of factors for support. First, in 2007 a New Jersey federal court found that success of a fantasy sports team depends on the participants’ skill in selecting players. Additionally, the Unlawful Internet Gambling Enforcement Act specifically exempts fantasy sports from the definition of “unlawful internet gambling.”
Second, DraftKings will argue that if season-long games are, to use the AG’s words “unquestionably legal,” DFS games should likewise be legal. DraftKings will argue that DFS games involve more skill than season-long since: (1) all players start on equal footing as opposed to randomly being assigned a draft order; (2) DFS allows players to analyze and react to more factors on a week-by-week basis (e.g., opposing defense, weather, injuries, etc.) and hone their analytical skills over the course of the season; and (3) unlike in season-long, DFS players must seek to maximize fantasy points subject to the assigned salaries and cap.
Last, DraftKings will describe two studies which resulted in the following findings: (1) 91% of DFS player profits during the 2015 MLB season were won by just 1.3% of the players; and (2) skilled players selected a higher scoring lineup than a randomly generated lineup at least 82% of the time and as high as 96% of the time depending on the sport. In fact, the AG admitted in his cease-and-desist letter that the top one percent of players win the vast majority of the winnings.
You Decide:
So, what do you think? Do any of the AG’s arguments have merit? Is there a meaningful distinction between a prop bet parlay and a DFS lineup? If so, what is it?
Is chance a material element in DFS games? If so, what constitutes the chance element? Do certain sports involve less chance than others? If so, where and how should the line be drawn?
Let us know in the comments!
About the Author
spensurf06
Spencer Payne is a litigation attorney in Florida following the legal
