Sports Gambling:

Game of Luck or Skill?

Investigative Research Essay

Charles Bonser

English 12

Messer 3

15 March 2017

In the NFL football season of 2016/2017 on average $110,000,000 were collected each

week in entry fees. That means over the course of the NFL season daily fantasy corporations
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received $1,760,000,000 (CNN Money). For those of you who do not know what fantasy sports

are, it is a game played online where players take turns picking out of a pool of players for their

fantasy team. Usually these teams are one season long and you use this team to compete over the

course of the season of your chosen sport. Each athlete receives points for their individual

performance such as amount of touchdowns, yards gained, or points in each contest or game.

They win or lose based on all of their athletes combined points in a week, compared to their

opponents combined points (New York). Sports gambling has not been a problem until recently,

the websites that usually host these fantasy sports never gave out payouts and their primary

objective was to keep fans interested in the sport. However, corporations like FanDuel and

DraftKings, which have just begun, are handing out millions of cash prizes daily and raising

concerns whether these games are gambling or just games of skill. Playing fantasy sports is an

entertaining hobby for many, but when these games hand out millions of dollars each day while

allowing professional players to manipulate the system it becomes a risk setting the debate for

whether sports gambling should be further regulated or allowed to operate freely.

The beginning of sports gambling can not necessarily be tracked back to one origin, but

one that can are fantasy sports. In the early 1980s while at a restaurant in Manhattan named La

Rotisserie Francaise, a sportswriter named Daniel Okrent invented the first fantasy league with

some friends. Because of the name of the restaurant, it was given the name Rotisserie Baseball.

The friends had their first draft, kept up with statistics through The Sporting News magazine

and recorded those statistics by hand. Since then fantasy has evolved, it began incorporating

other sports and now has emerged into what it is today (Beginning). The Professional and

Amateur Sports Protection Act, also known as PAPSA was passed in 1992 as a federal law, and

restricts all but a handful of states from legalizing sports gambling (Sports Gambling). Although
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they banned sports gambling from the states other forms of online gambling like online poker

games rose. With the rise of these games and the popularity of the internet itself there soon

would need to be more regulations put in place. So later, in 2006, the Unlawful Internet

Gambling Enforcement Act was passed prohibiting online gambling; the act prohibits businesses

from knowingly accepting payments in connection with the participation of another person in a

bet or wager that involves the use of the internet (Regulation). With this act online poker rooms

were quickly shut down even though many claimed poker to be a game of skill just as many

argue daily fantasy sports games are today. Normal fantasy sports sites like ESPN, CBS, and

Yahoo offer the competitions in which players assemble their own teams, then watched how their

players perform over an entire season. The Daily Fantasy sports phenomenon which nearly

involves any and all televised sports, started with the launch of FanDuel in 2009 followed by its

competitor DraftKings in 2011. They have many styles; you can play against a single player or

play in a pool where the top half of the bunch wins, both in which you are able to double your

money. The most popular style is the tournament which offers a $1 million dollar payout for the

winner (Deep End). The legal exemption for daily fantasy sports is based on its definition not as

gambling but as a game of skill. Today, these daily fantasy sites offer daily contests, million-

dollar prizes and bets on individual sports every day, thus magnifying the element of chance and

making the exemption tougher to defend.

Although daily fantasy sport corporations have tried to stop sharks by matching

experienced players against one another, sharks manipulating unskilled players still happens.

Sharks are making most of their money in high stakes contests against other less-skilled

players with reasonably large bankrolls. We call these players big fish, they have large enough

bank rolls while also being unskilled making them easy targets. Having said that, many people
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fail to see a reason why sharks really need to be playing with absolute beginners at all (Miller).

As one could gather from the visual explained earlier; big fish make up most of the entry fees at

36%, and only sharks or the top 1.3% of players came out with a return on investment (Kim) .

Sharks are players who go in depth studying each player they draft and have an idea about the

productivity they will see out of each player. Is it so bad to be paid for something someone is

good at though? What is the difference between an accountant being good with numbers and

makes a career out of it versus a professional daily fantasy sports player? Currently, it is legal

and people play it everyday to get their hands on easy money. Daily fantasy sports are online

games like any other, and some people will be better at them than others. Like other games, it

makes sense to try to match players of similar skill levels so the best players are not playing in

contests with the most casual players. But I do not think there is anything unfair or unethical

about a good player playing the contests they are permitted to play (Miller). The development of

fantasy sports is good for those professional players but for the general public and those who lose

most of the time, it is not. The complete change fantasy sports has encountered over the last 8

years is staggering and will continue to evolve. In just daily fantasy sports alone, they saw a

525% increase in players from 2014 to 2015 (CNN Money). Instead of being a fun way to get

involved in sports with some buddies; it has now become a feeding ground where players go to

take money from strangers without any relationship to them at all.

These corporations like FanDuel and DraftKings continue to hammer down your ear all

the good of daily fantasy games. For the first 10 months of 2015, DraftKings spent more than

$200 million on advertising; a surge that peaked at the start of the football season, when one of

their advertisement ran seemingly every couple of minutes on television (Kang). However these

companies do not show you the bad; they only show how easy it is to win and that if you do
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not join, you are missing out. Gambling is defined as a person stakes or risks something of value

on the outcome of a contest of chance or a future contingent not under his control or influence

(York). Based on that definition, it is easy to see how many believe fantasy sports to be a form

of gambling. Those who play daily fantasy games whom are constantly cheated out of their

money are raising concerns and becoming agitated with the entire operation. With more concerns

being raised, FBI investigations have begun on whether these sites should be considered as

online gambling or a game of skill. On Nov. 11, 2015 New Yorks Attorney General, Eric T.

Schneiderman, issued cease-and-desist letters to DraftKings and FanDuel, ordering the

companies to stop accepting wagers inside New York. According to an official statement by

New Yorks Attorney Generals office; an investigation found that both companies consistently

use deceptive advertising to lure consumers into an unregulated online gambling operation that,

while marketed as a game that anyone can win, in fact distributes the vast majority of winnings

to a small subset of experienced, highly sophisticated players. (ConsumerAcquisition). Some

positives to sports gambling; as a whole are they are fun ways to hang out with some friends,

also the rush of excitement you receive after winning brings people back and keeps fans

interested in sports. When fans are interested in sports, they buy tickets for games, buy favorite

players jersey, or team apparel helping our economy and also each sporting association. For

those who are good and consistently win, they believe it is a game of skill and feel taking this

away is impeding on their freedom to do something they are good at. Some cons of sports

gambling are that they are difficult to regulate, and many believe the integrity of the sport and

athletes as a whole will be affected. More focused on daily fantasy games most people who

participate have difficulty winning because mass majority of profits are taken by professional

players. Some solutions to the daily fantasy sports game problem are as such; the federal
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government can determine that they are a game of skill and leave them untouched and let them

operate without regulation. A second solution is they can shut the entire operation down,

ultimately making any fantasy games with pay-ins/pay-outs illegal. Obviously you cannot stop

people from betting on their teams with some buddies at the bar but prohibiting it online perhaps,

would be possible. A third solution is the federal government could repeal PAPSA and leave it

to the states to legalize it or not. Some states will legalize it and some will prohibit it, and that is

how it should be (Miller).

Fantasy games can be fun and entertaining, these corporations have a good way to get

citizens more involved in sports with a cash award and many people enjoy it. Whether or not

these games are left unregulated, get further regulated or get completely shut down, problems

over money continue to arise. It happened before with online poker and now daily fantasy sports

are on the brink of being shut down. Will there be a future conflict involving this thin line of

gambling or skill?
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Works Cited

ConsumerAcquisition, Tom Young. "Have DraftKings and FanDuel Created Fantasy Sports Own

Advertising Phenomenon?" Social Media Today. 18 Feb. 2016. Web. 09 Mar. 2017.

"Five Stunning Stats about Daily Fantasy Sports." CNNMoney. Cable News Network. Web. 07

Mar. 2017.

"Gambling Laws and Regulation in the United States." GamblingSites.com. Web. 08 Mar. 2017.

"In The Beginning." The Beginnings of Fantasy Sports. Web. 07 Mar. 2017.

Kang, Jay Caspian. "How the Daily Fantasy Sports Industry Turns Fans Into Suckers." The New

York Times. The New York Times, 06 Jan. 2016. Web. 06 Mar. 2017.

Kim, Eugene. "Unless You Really Know What You're Doing, Fantasy-sports Betting Leagues

Are a Sucker's Game." Business Insider. Business Insider, 06 Oct. 2015. Web. 08 Mar.

2017.

Miller, Ed. Personal Interview. 3 March 2017

"New York Rules DFS a "Game of Skill," Maintains Ban on Internet Poker." Competitive

Enterprise Institute. 21 June 2016. Web. 08 Mar. 2017.

"Sports Gambling - Legal Sports Gambling." Sports Gambling - Legal Sports Gambling -
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Nevada, Betting, Books, and Bets. Web. 08 Mar. 2017.

"Watch The Deep End: Meet the Sharks of Daily Fantasy Sports (1969) Online - Amazon

Video." Amazon.com: The Deep End: Meet the Sharks of Daily Fantasy Sports: Tom

Griffiths, Ed Miller, Nick Dunham, Jonathan Bales. Web. 08 Mar. 2017.