Is FanDuel legal?

The short answer

Yes, fantasy sports is considered a game of skill and received a specific exemption from the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA 2006). FanDuel uses exactly the same rules as any other season long fantasy sports game, the only difference is that our games last only a day.

The long answer

According to a 2007 study, fantasy sports is played by 29.9 million people in the US and Canada. In fact 22% of US males aged between 18 and 45 with internet access have played fantasy sports. It is estimated that fantasy sports has a $3-4 billion annual economic impact across the sports industry and it is now supported by all the major leagues.

Studies by the Fantasy Sports Trade Association (of which FanDuel is a member) have estimated that around 73% of fantasy sports players play paid fantasy games (i.e. games with an entry fee). To meet this demand, major networks such as CBS, NBC and Fox all offer pay to play fantasy sports games.

The laws relating to fantasy sports varies by state however in the vast majority of them fantasy sports is considered a game of skill and therefore legal. In most states a game of skill is classed as game where skill is the predominant factor in determining the winner. The states where our lawyers believe the law is unclear or questionable about the legality of fantasy sports are Arizona, Iowa, Louisiana, Montana or Washington. Therefore we do not offer paid entry games to residents of those states.

In 2006 the federal government passed a law called the Unlawful Internet Gaming Enforcement Act which was designed to prevent gambling over the internet. The law included a carve out that clarified the legality of fantasy sports. Specifically, it exempted:

"participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation team is based on the current membership of an actual team that is a member of an amateur or professional sports organisation and meets the following conditions:


1. All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by participants.

2. All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

3. No winning outcome is based:
a. On the score, point spread, or any performance or performances of any single real world team or any combination of such teams; or b. Solely on any single performance of an individual athlete in any single real-world sporting or other event."

Daily draft games like FanDuel are a new variant of fantasy sports having only started to appear in the last couple of years. Major networks such as NBC, Comcast and Fox have launched their own versions of daily draft fantasy sports games.

FanDuel takes the legal status of the games it offers very seriously and does its utmost to ensure compliance with existing state and federal laws. For more information please refer to our terms. If you have any further concerns about the legality of our games please do get in touch.

FanDuel is a member of the Fantasy Sports Trade Association and a partner of STATS LLC who provides our real time sports statistics.

Reference:
Wikipedia entry on Fantasy Sports