Daily Fantasy Sports and Skill Based Games and Contests
(updated Nov 11, 2015)
Fantasy sports contests are considered Games or Contests of Skill and have received a specific exemption from being considered gambling, betting or wagering by the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA 2006).
The laws relating to fantasy sports contests vary state by state. In most states, games or contests which collect real money entry fees to join; and provide a competition with the opportunity to win real money prizes, must be games or contests of skill to be legal. All of the real money contests available on Tradesports.com are contests of skill.
In most states, the classification of a game or contest as one of skill is determined by whether or not skill is the predominant factor in determining the winner of a contest on a consistent basis. The states where our advisors have suggested caution due to uncertainty about the accepted definition of skill based games and fantasy sports are New York, Arizona, Iowa, Louisiana, Montana, Nevada, Florida and Washington. Therefore we do not offer games that require real money entry fees to residents of those states. We constantly monitor related legal developments in all states to stay current with legislative changes when they occur (states updated November 2015).
The Unlawful Internet Gaming Enforcement Act 2006 was designed to help prevent unlicensed GAMBLING over the internet. The law included certain exemptions by way of definitions that attempted to clarify the law related to what we now call "fantasy sports". Specifically, it exempted games from being considered to be illegal gambling when:
"participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation team is based on the current membership of an actual team that is a member of an amateur or professional sports organisation and meets the following conditions:
- 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 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:
- On the score, point spread, or any performance or performances of any single real world team or any combination of such teams;
- or solely on any single performance of an individual athlete in any single real-world sporting or other event."
Tradesports.com is a completely new way to play fantasy sports. No Tradesports.com contests involve the creation of a fantasy or simulation team. Tradesports.com contests are based upon contestants' PREDICTIONS on a plurality of outcomes in a sporting or other future event. In compliance with UIGEA;
- All Tradesports.com prizes are established in advance and are not dependent upon the number of participants.
- All Tradesports.com contest outcomes are determined by the relative knowledge and skill of the contestants competing against against each by making better predictions than the other contestants, and the predictions made by contestants are specifically based on the statistics of players and teams related to the possible outcomes of a plurality of events in a game, a series of games, or even a season.
- No winning outcome of a Tradesports.com contest can be determined by the score, the point spread or the single performance of any real world team, combination of teams, or any single player's performance.
Notwithstanding the above, fantasy sports contests that may not be considered to comply with the UIGEA "carve outs" (as can only be determined in a court of law) do not necessarily violate the UIGEA. The UIGEA requires an underlying predicate state or federal law violation. There are NO existing federal statutes on which prosecution of a skill based contest where contestants control their own success could be based on. Therefore, a prosecution under UIGEA must be based on a violation of a STATE law. Tradesports.com only allows contestants to participate that are resident in states that clearly permit skill based games or contests to be played for real money prizes, and thus are compliant with all relevant state laws.