According to at least one state, fantasy sports is illegal gambling. That being said, the debate over whether or not this is against the law is not over. For this reason, you may want to understand the state laws that are applicable to you if you are thinking of playing fantasy sport games and possibly making some money in the process.
Fantasy sports contests are illegal in New York, according to a recent New York Supreme Court’s Appellate Division. The NYSCAD decision upheld a lower court’s ruling that found fantasy sports contests violate New York’s constitutional ban on gambling. That being said, legal experts believe that further lawsuits are likely not just in the state of New York but elsewhere.
According to the New York State Constitution, it is prohibited to engage in “lottery, the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling.” It further states that the New York legislature shall pass laws to prevent violation of this section of the state constitution. Not surprisingly, the rulings sparked a debate about what “gambling” means. In 2016, however, the state assembly amended its racing, wagering, and breeding law to exclude fantasy sports betting from the definition of gambling. A few months later, several individuals who claimed their lives were adversely affected by gambling filed suit for declaratory judgment. The case, White v. Andrew Cuomo, et al., alleged the 2016 law violated the state constitution and demanded enjoinment of its implementation. The trial court granted in favor of plaintiffs, finding that the 2016 law is unconstitutional.
NY Supreme Court Appellate Division’s Decision
The NYSCAD rejected the defendant’s argument on appeal, that the standard that defines “gambling” is whether there is an element of chance or skill under People ex rel. Ellison v. Lavin. Instead, the appeals court looked into state penal code to define “gambling” as it is used in the state constitution. In that context, the term refers to risking something of value in a contest of chance, in the hopes of getting something of value in return in the event of a specific outcome. Unlike the Ellison definition, a “contest of chance” means that the outcome is dependent upon an element of chance despite the fact that skill may also play a factor in individual results. This definition, the Court reasoned, rejects that chance must be the dominating element.
As a result, fantasy football contests fall under gambling within the meaning of the state constitution. Although skill is helpful in winning, chance is still a material factor involved because participants cannot control how players will perform. Intervening events such as injuries, illness, poor officiating, and weather conditions can play a substantial role in a specific player’s success.
The Issue is Evolving
The future of fantasy football and other fantasy sports is uncertain not only in New York, but also how the ruling may affect other jurisdictions. This is because fantasy sports contests are a very lucrative business across the United States. Before you get involved in a fantasy league, be sure to know whether or not it is considered gambling–and if it is considered legal–in your state.
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