Fantasy Sports: Gaming or Gambling?

A typical fantasy sports app.

By Juanice Gray,

Fantasy sports feels like gambling and looks like gambling but it is not gambling. The federal government defines fantasy sports as a game and not internet gambling. The Louisiana Senate approved legislation in May to allow voters to decide whether to allow fantasy sports games in their parish.

The issue is on the Nov. 6 ballot. Each parish will decide whether people should be able to take part in fantasy sports leagues run by professional sites. Fantasy sports are a huge moneymaker, generating an estimated $7 billion nationally going into 2018.  Fantasy leagues among friend and peer groups is already legal in Louisiana. Fantasy sports differs from online sports betting where gamblers wager on the outcome of a particular game, race or season. Fantasy games put players in a strategic position.

They must create their team and manage it, as well as predict the outcome of each performance, which in turn results in skill, rather than luck. Gambling is based on luck. That statement draws different views. Betting on poker and some casino games use strategy, but are arguably far more restricted than fantasy sports. One of the main differences between regular sports betting and fantasy sports is that real money is not needed in fantasy. In fact, many platforms don’t include the opportunity to bet real money. State Rep. Kirk Talbot, R-River Ridge, who sponsored the legislation authorizing the ballot measure, expects that at least 50 of Louisiana’s 64 parishes will legalize fantasy sports betting.

How does it work?

Participants pay to create a virtual sports team. The outcome depends on selecting players and accumulating points. One restriction in the bill is no team can be based on members of actual teams. Another is prizes should be made known to participants beforehand, and their value can’t be determined by the number of participants playing or the amount of fees paid. Apps are used to participate.

Those apps have the capability to locate the gamer based on physical location, also called geo-fencing or geolocation. This should allow participation only in parishes where the measure passes. Another restriction on the gaming states outcomes can not be determined by a point-spread, by outcomes of any real-world team or by the single performance of an individual athlete.

Who benefits?

Games would be regulated by the La. Gaming Board and taxed. Much of the revenue will be generated by fees and through “draft” parties. Many fantasy leagues host parties on draft day. This in turn creates revenue for restaurants, grocers and liquor stores. The state is home to a variety of legal casino gambling options, from slot machines at race tracks to full-fledged commercial casinos, riverboat casinos and tribal resorts.

Rep. Jay Luneau, whose area includes portions of Natchitoches Parish, said he knew very little about fantasy sports gaming since he has never personally participated. “Apparently lots of people enjoy it,” he said. “I don’t think this type of betting is any worse than any other form. The good thing is parishes who don’t want it don’t have to pass it.”

State Senators and Representatives voting for the proposition include Sen. Luneau, Rep. Terry Brown and Rep. Frankie Howard. Sen. Gerald Long voted nay. Rep. Kenny Cox was absent and did not vote.