Delaware warns off daily fantasy sports operators
News on 9 Jul 2016
News on 9 Jul 2016
Justice Department officials in the state of Delaware, one of three US states that has legalised online gambling, have opined that in the absence of state laws specifically declaring daily fantasy sports to be lawful, the genre has a significant element of chance and is therefore construed as illegal gambling where cash prizes are offered.
Reporting on the opinion, the publication Delaware Online revealed this week that fantasy sports betting companies FanDuel, DraftKings and Yahoo! have been advised of the opinion and warned that they are not allowed to operate in the state if they offer cash awards.
State gambling regulators have also been advised of the opinion.
“The Department initially refrained from taking formal action because certain online fantasy sports companies indicated that a change in Delaware law would be proposed in the state legislature,” a statement from state Attorney General Matt Denn’s office said.
“However, with the General Assembly’s session expiring on June 30 and no such changes in the law having occurred, DOJ sent formal notices to the companies Thursday.”
The letters asked the companies to add Delaware to their lists of states in which players are not allowed to win monetary prizes.
State officials pointed to the Delaware Constitution and state and federal case law to determine that online fantasy contests that involve payment are gambling because they rely on chance, as opposed to skill.
However, they noted that daily fantasy sports operators may still carry on business if they are willing to offer their contests without the possibility of winning money… or if Delaware law is changed by the legislature.
“We are certain that many Delaware residents and visitors would enjoy participating in the full array of fantasy sports contests, including those that require payment for participation and have cash awards,” the statement said. “But until such contests can be offered legally, the Department of Justice must enforce the law.”
In related news, daily fantasy sports remains in limbo in New York state due to delays in Governor Andrew Cuomo signing into state law a legalisation bill passed by the Legislature mid-June this year (see previous reports).
