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US Application of US law to fantasy sports betting Participants in fantasy sports leagues highest points total in the 12-team largely unresolved under US league wins the prize. The prize federal law 6 . typically pay a fee to participate, level depends upon the amount of which is then used to allocate a cash entry fee paid. At the highest level Underpinnings of the prize to the ‘winner’ of that league, prize, the participant pays an entry perception of legality after points have been allocated to fee of $499.95 for the opportunity Those associated with the fantasy participants based on the to win $3,500 in cash. The next sports industry focus much highest level has an entry fee of attention on the US Supreme performance of ‘real life’ players. $249.95 and a prize of $1,600 5 . Court decision not to review the Linda J. Shorey, Dennis M.P . Ehling, Once in a league, a participant decision in ‘C.B.C. Distribution & Robert A. Lawton and Anthony R. creates a fantasy team from among Marketing, Inc. v Major League Holtzman of K&L Gates LLP examine the current professional athletes Baseball Advanced Media, L.P.’ 7 . playing the sport the league features. Some commentators believe this if US law - which prohibits wagering For example, a US fantasy football decision supports a conclusion that on sport - applies to the operators of team would be comprised of wagering on fantasy sports is legal. fantasy sports leagues. athletes currently playing in the Other ‘evidence’ that is often National Football League (NFL), offered to support the legality of Fantasy sports is big business in the such as the fantasy teams in wagering on fantasy sports include US, with more than 27 million Sportsline.com’s fantasy football the exception for fantasy sports in players and annual revenues in the leagues. The fantasy teams in a the definition of ‘unlawful internet range of $800 million to $1 league compete weekly against each gambling’ in the Unlawful Internet billion 1 . The majority of the players other by comparing the actual Gambling Enforcement Act participate in traditional fantasy statistical performance of the (UIGEA) and the decision in Humphrey v Viacom, Inc. 8 While leagues such as football and athletes on each fantasy team. In baseball; however, fantasy leagues most leagues, the participants have these three items do provide have gone beyond the traditional the option to select players on their ‘evidence’ of legality (i.e., support sports and now extend to bowling, ‘team’ to ‘play’ and which to ‘sit’ each an argument), they are by no darts, NASCAR and fishing. With week, i.e., selecting which players’ means conclusive. A careful look at such heavy participation, it is easy statistics will be counted for their this ‘evidence’ and a review of the to forget a key question - are fantasy team each week.At the end Wire Act 9 , shows that a fantasy sports leagues legal? There of the season, the fantasy team with counterargument can be made. is no straightforward answer to the best record wins. The participant that question. This article explores who owns the team winning the CBC Distribution v Major some of the issues surrounding the league will receive a prize - either League Baseball question with respect to US federal cash, as with the Sportsline.com In the ‘CBC Distribution’ decision, law 2 . winner, or other prizes. In effect, to the Eighth Circuit Court of win the prize, participants ‘bet’ on Appeals addressed the issue of Nature of the game the week-to-week performance of whether fantasy sports leagues are Initially, it is necessary to the professional athletes they required to pay a license for the understand the nature of the selected for their fantasy team and right to use Major League Baseball activity. Although many websites the participants own the ability to player names and statistics in offer a ‘play for free’ option 3 , select the ‘right’ athletes to ‘play’ for fantasy games. The original participants in fantasy sports their fantasy team each week. plaintiff in the case, CBC leagues typically pay an entry fee to The query explored below is Distribution and Marketing, Inc. join the league. The fees range whether the league operators that (CBC Distribution), operated from a nominal amount to several accept fees for these games (fees fantasy baseball leagues through its thousand dollars. In exchange for that ultimately will fund the prizes website. From 1995 through 2004, the fee, participants have an awarded) are legally any different CBC Distribution licensed the use opportunity to win prizes that, in from a person, entity, or operator of players’ names and statistics some cases, are quite substantial. of a website that accepts wagers on from the Major League Players For example, Sportsline.com offers a weekly NFL game (which, with Association. In 2005, after the participants the opportunity to limited exceptions, is illegal in the license agreement expired, the enter into a 12-team fantasy US)? While many believe there is a Players Association licensed the football league 4 . The team with the difference, reality is that the issue is exclusive right to use players’ 08 world online gambling december 2008
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