After the recent shut down of Poker sites in the U.S., many fantasy sports sites have been inundated with questions regarding the legality of fantasy sports within the United States. What comes as surprise to many people is that the answer is a resounding yes. Fantasy sports can be legally played online for money within the U.S. and there has been federal legislation specifically put in place allowing for fantasy sports to be played. The Unlawful Internet Gambling Enforcement Act of 2006 which was designed to curb fraud and other issues with online gambling has a clause within the bill that states fantasy sports are not games of chance but games of skill, essentially eliminating any doubt about the legality of fantasy sports.
What consumers have to be cautious about is what types of fantasy games they play. Nearly all games out on the market today are legal but a few cross the line into gambling. The biggest difference between a legal fantasy game and an illegal one is how the teams are picked. True fantasy sports are solely based on statistics and not on the outcome of the game. This is outlined in the 2006 Unlawful Internet Gambling Enforcement Act. Other games such as “Pick em” and “Pool” games shouldn’t actually get advertised as Fantasy type games because the outcome of a game or competition has a direct impact on who wins. Even though these types of games are widely popular on and offline, they are illegal to play online in the United States because when it is broken down to its simplest form, people are betting money on a team’s outcomes. This fact alone considers it gambling.
Granted that statistics are the largest element that makes fantasy sports unique from other forms of illegal gambling, there are still a few other rules that are outlined below that keeps these games legal.
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 those participants.
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.
No winning outcome is based solely on any single performance of an individual athlete in any single real-world sporting or other event.
Another issue that can quickly be forgotten about the poker site shut down was how they were hiding their profits and either coercing banks or tricking them into taking payments from them. If you have ever tried to buy chips at a poker site you saw just how hard it was. Since fantasy sports are legal they don’t have to hide behind all the smoke and mirrors that poker did. The only concern for a fantasy sports player in this regards is that they need to claim any prizes on their taxes worth over $600. However, many Fantasy Sports companies already include a tax form with any prizes worth over $600, so there is no confusion when it comes to that time of the year.
Sports fans can rest easy knowing that the mainstream fantasy sites offer a great way to enhance your favorite sports and are completely legal.