Delaware allows sports lotteries, which requires a player to get lucky enough to win several wagers at once.
Delaware Attorney General Matthew Denn sent a letter to FanDuel, DraftKings, and Yahoo! telling the three companies to cease and desist from DFS gaming in the state. The Delaware Department of Justice is the eighth DoJ in the United States to declare daily fantasy sports a form of gambling. In all, 30 states are considering laws to either ban or regulate DFS.
The Delaware Department of Justice informed state gaming regulators in March that it beleived daily fantasy sports to be illegal. The DOJ hesitated to declare against DFS at the time “because certain online fantasy sports companies indicated that a change in Delaware law would be proposed in the state legislature.”
Delaware Legislature Declines to Pass a Bill
At the end of last month, the Delaware State Legislature convened for the summer without new DFS legislation being considered. With no action being taken on the lawmaking front, Matthew Denn decided it was time to act.
Denn Considers DFS a Game of Chance
Matthew Denn’s letter stated the case that chance is the dominant factor in daily fantasy sports. The latter said, while the team owner selects players and manages a salary cap, that the owner has “no role in how these players actually perform once the real-life games or events occur.”
The Delaware DOJ claimed that the human element in daily fantasy sports makes DFS contests a game of chance. Because human behavior is unpredictable, “the most skilled participants might lose and the less skilled participants might win.”
Proponents Consider It Game of Skill
Proponents of legal daily fantasy sports argue the pastime is a game of skill. While any one contest might be unpredictable, they say DFS is skill-based, because contestants use mathematical models to exploit the match-ups with the best cost-to-value ratio. Skilled owners called “grinders” use strategies and statistics to win consistently, and thus professional daily fantasy sports contestants exist.
Opponents of DraftKings, FanDuel, and Yahoo Fantasy Sports have pointed out that 91% of winnings are collected by a small group of contestants. The DFS companies have argued that that statistic proves that DFS is skill-based, because a group of better-informed, logic-based owners succeed consistently. Similar arguments have been used on behalf of poker, which has elements of chance, but also professional-level players who make a living playing cards.
“Must Enforce the Law”
Mike Denn’s statement concluded with remarks to the fantasy sports contestants throughout Delaware. Denn wrote to the fantasy sports aficionados, “We are certain that many Delaware residents and visitors would enjoy participating in the full array of fantasy sports contests, including those that require payment for participation and have cash awards. But until such contests can be offered legally, the DOJ must enforce the law.”
Fantasy Sports in America
The busiest time of the year for fantasy sports is around the corner. Fantasy football is the most popular fantasy sport, and the NFL’s training camp and preseason is two weeks away. August each year is when fantasy football drafts happen, and when more Americans search fantasy sports sites than the rest of the year. It is also a time when the season for fantasy baseball, the second-most popular fantasy sport, is in full swing.
While most Americans play year-long fantasy sports, it is also the time when DFS companies buy the most commercial air time and new players are likeliest to sign up for an account at DraftKings or FanDuel. Thus, Mattew Denn is likely to have wanted to shut down operations before the new fantasy football season got underway.
Anti-DFS Campaign
The one-day fantasy sports industry has been under fire for the past 9 months, since a scandal rocked the two biggest DFS sites. A DraftKings employees won 2nd place at a big weekly tournament on FanDuel. When that employee mistakenly posted to Facebook start percentage stats (he claimed only were available to him after contests began), many players came to believe the employee had used DraftKings start percentage stats to get an unfair advantage in the FanDuel contest.
Since then, US attorneys, state attorney generals, gaming control boards, and other state-level officials have taken actions against the DFS industry. In several cases, state legislatures have been spurred to institute regulations, though these new statutes tend to protect the industry, while assessing taxes.
Sports Lotteries Require Luck
Limited sports betting is allowed in Delaware. Sports lotteries require a player to make a parlay bet on the outcome of sporting events. To win, the player must win all the bets on the parlay. A $2 bet is the minimum required to play a sports lottery game.
No one consider such sports bets a game of skill. Given the sophistication of bookmakers, winning all the wagers on a parlay is akin to winning several coin tosses in a row.
