Fantasy Football and the UIGEA

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The Unlawful Internet Gambling and Enforcement Act of 2006 (UIGEA) made online betting illegal in the United States, and while there is much grumbling against its effectiveness and purpose — as well as plenty of loopholes, like betting at offshore online sites — a golden era of online gambling continues to be many gamblers’ unrealized dream. While betting online occurs anyway, the UIGEA does officially continue to hold sway on U.S. soil, which has led to the increasing volume of what used to be a small complaint against one of the most popular pastimes the American public has ever known. Why is betting on fantasy football online legal?

What It Is

Fantasy football is a competition, in which the people “playing” choose imaginary teams from among the actual players in the National Football League. Your team scores points (or doesn’t) based on the actual performance each week of the actual players as they’re working and playing for their real-life respective teams. So, if your kicker gets injured while playing the Ravens, or your running back has two fumbles when he’s up against the San Diego defense, or your quarterback passes for 400 glorious yards one sunny afternoon in Miami, all those real events affect the scoring — be it positive or negative — for your fantasy team. But what does fantasy football have to do with the UIGEA? Well, fantasy football isn’t undertaken for bragging rights alone — it’s about winning cold, hard cash.

Why It Matters

Currently, fantasy football generates more money than the NFL itself. Over 32 million people play each season, and $15 billion dollars are pumped directly into the fantasy league by those people. Most of that money is won and lost online. Interestingly, betting online in relation to fantasy football is protected by the very act that made other types of online gambling illegal — the UIGEA — and for fans of other types of online sports betting, this reality can seem more than tacitly unfair. While sports betting laws in the United States are notoriously complex, the singled-out explicit protection for fantasy football within the law that made other forms of online gambling illegal is hard to square. That being said, fantasy football’s privileged legal status may hold some clues as to the possible future of online sports betting. Does the fact that fantasy football is allowed — and that it’s mainstream — bode well for the legal future of other forms of online betting? Or will fantasy football at some point face the same legal hurdles that other types of online sports betting currently face?

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Why It’s Legal

To answer these questions, it’s important to first understand why the law differentiated fantasy football betting to begin with. The UIGEA specifies a gambling exemption for any sports betting that “…has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance)…” In other words, fantasy football is protected by the UIGEA, because it’s considered a game of skill, as opposed to a game of chance. While poker afficianados and race horse authorities may disagree vehemently, the UIGEA considers their knowledge, expertise, and subsequent wagering to be a matter of odds, possibilities, and luck — nothing more.

What’s The Future?

There are a couple of foreseeable ways in which fantasy football’s legal protection could play out in the coming years. One possibility is that fantasy football’s exemption could affect other forms of online sports betting in a positive way so that if and when Congress ever revisits the issue of online gambling, they decide that what is good for the goose should be good for the gander, allowing all forms of online betting to come safely back into the fold. Another possibility is that fantasy football’s exemption could effectively sour the batch. Especially as weekly pay-to-play sites grow in popularity, the argument about the league being an expression of skill grows thin. Choosing a different team and wagering each week before kickoff doesn’t seem all that different from betting against the spread at a different online sports betting site. The primary difference seems to exist only in the branding — one is called fantasy football and is, therefore, legal, while the other is a sports betting site and is, therefore, illegal.

In short, it’s still way too early to tell how fantasy football’s increasing popularity and money-generating capabilities will affect the rest of the online sports betting world, but one thing seems certain: Fantasy football will affect the outcome, be it good or bad.

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