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ARTICLE · 01 APRIL 2015

Fantasy Sports Or Gambling? The Difference "Skill" Makes

Fox Rothschild LLP
Fox Rothschild LLP
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In 2006 the federal government passed the Unlawful Internet Gambling Enforcement Act (the "Internet Gambling Act"), which was enacted to prevent gambling over the internet.

United StatesMedia, Telecoms, IT, Entertainment
Steven Daroci
Steven Daroci
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With March Madness in full effect, sports fans are flocking to sites like Draft Kings and FanDuel, daily fantasy sports sites where users can go to wager real money on – not on sporting events per se but on the performance of the individual athletes competing in those games.

The popularity of these daily fantasy sites cannot be overstated. Just last week Fortune reported that Draft Kings is currently raising venture capital funding at a valuation of at least $1 billion. So how are daily fantasy sites flourishing while sports gambling remains illegal in the United States outside of Nevada, Delaware, Oregon, and Nevada?

The answer to this question is the distinction between games of skill versus games of chance. Whereas gambling on the outcome of sporting events are considered games of chance, fantasy sports, are considered games of skill.

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