Why Are Sites Like Draft Kings Legal?
- December 16, 2015
- The Law Office of Greg Tsioros
- Comments Off on Why Are Sites Like Draft Kings Legal?
Online Gambling Laws in Texas
In recent months, online fantasy football sites have been getting a lot of attention in the media. Featured by online marketing companies, podcasts, radio and TV ads, sites like FanDuel and Draft Kings claim that their users can win thousands or even millions of dollars simply by playing fantasy football online. Though this may sound too good to be true, these sites have actually paid out large sums of money to players who are successful at this system.
Some people may be surprised that this activity is actually legal under US and Texas law. Although online fantasy football may sound like a form of online gambling, which is illegal in most states, it is actually legal because of the way that the law is applied.
How Is It Legal?
Many people know that online gambling is illegal in most places in the United States. According to the Unlawful Internet Gambling Enforcement Act of 2006, placing bets using the Internet is a crime that can lead to federal prosecution. Playing blackjack or online slot machines is an illegal activity, even if only a small amount of money is won.
However, this isn’t the case with online fantasy football. This is because of the way that the law is worded. To understand this difference, it’s important to examine the phrasing of the law.
According to the law, it’s illegal to pay out money to people who play “games of chance” online. A game of chance is a system where the outcome of the game isn’t necessarily influenced by the skill of the player. These games include:
Typical casino games like these are based on random events. For example, a person who throws dice at the craps table or uses a roulette wheel can’t use skill or knowledge to influence the outcome of game. No matter how much practice a person undergoes, it’s not possible to cause a pair of dice to roll a certain number.
Some people may argue that games like poker and blackjack require skill but it’s impossible to determine what cards will be dealt so chance is still involved.
Fantasy football is different because online users study the skills and abilities of actual football players. They use research and a degree of skill to determine which players and teams are most likely to perform well. Federal law states that placing bets is legal if the people involved in the online game are basing their decision on statistics and patterns, rather than random chance.
It may be illegal to bet on the outcome of an individual game but paying out money based on the performance of players in multiple games over time is allowed.
Legal Online Gambling
Although federal law banned online gambling in 2006, the ban on online gambling may be changing soon. Several states have begun passing laws that allow legal online gambling by their own residents. For example, New Jersey has passed laws to allow gambling in online games of chance and Nevada and Delaware are also moving in this direction.
In some cases, some forms of online games of chance are legal. These situations include:
- Games of chance that don’t pay out money
- Fantasy sports that don’t involve bets on the outcome of games
- Certain gaming sites based in foreign countries, like India
Some people say that the legality of online fantasy sports leagues is a loophole, others say that it is a legitimate system that rewards the skill and research of its users. Either way, these sites are currently legal because they do not rely on making payouts based on random outcomes.
Even though these sites are legal, many forms of online gambling are still illegal at the state and federal level in Texas. A person who is facing charges of online gambling or racketeering will need a good legal defense. Hiring an attorney with experience in this field may help a defendant prepare a legal defense to fight charges in court or plead to lesser charges.