Daily Fantasy Sports: An Industry in Flux – An Analysis of State-By-State Approaches to DFS

March 10, 2016Articles American Gaming Lawyer Spring 2016

The popularity of fantasy sports has exploded in recent years with the rise of daily fantasy sports (“DFS”). The popularity of DFS stems from the excitement of being able to select a new variation of athletes on a daily basis, seven days a week and 365 days a year. Unfortunately for DFS operators, the increased popularity of DFS, along with allegations of a DFS employee exploiting insider information, has also led to the questioning its legality and an outcry for regulation of the industry.

As of March 1, 2016, legislation was pending in 28 states concerning the regulation of DFS and its legality under state law. While some states have moved expressly to legalize DFS, such as Virginia, and other states have proposed regulations to regulate DFS, such as Massachusetts, DFS has been historically prohibited in other states, such as Arizona, Iowa, Louisiana, Montana and Washington. Further, state Attorneys General, such as those in Mississippi and New York, have recently taken steps to prohibit DFS within their states, and state gaming regulators, such as those in Nevada, have deemed that DFS constitutes gambling that may only be offered pursuant to a state gaming license. The varied approaches to DFS in several jurisdictions are considered below, along with the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”), which rests at the forefront of the debate concerning the legality of DFS.

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