Vermont Attorney General: Daily Fantasy Sports Apps Illegal
This past Friday, a lawyer for the Vermont Attorney General’s office made the claim that fantasy sports are a form of illegal gambling according to state law. The statement was proffered during a senate committee hearing that was held to discuss a bill seeking to legalize and regulate daily fantasy sports contests in Vermont.
A bill introduced by Senator Kevin Mullin on January 7th seeks to clarify the definition of “fantasy sports contests” and implement consumer protections such as setting the minimum age for participation at 18, prevent state employees and athletes from participating, operators to submit to third-party audits and to ensure customers’ funds are kept segregated from fantasy sites’ operational funds.
About a week later, a senate committee hearing was held to discuss the bill and that’s when John Treadwell, chief of the criminal division at the AG’s office, protested the bill on the basis that daily fantasy sports meet the state’s definition of gambling. Tread well said that the AG’s office believes that “daily fantasy sports fall within the coverage of Vermont’s gambling statutes.”
He went on to say that “our concern is what it does is take one variety of illegal, for-profit gambling and makes it legal without any consideration for why this particular one is being chosen and others are not.”
A quick look at Vermont’s gambling statutes shows the basis for the AG’s conclusion. State law considers an activity to be gambling when a person “knowingly plays a game of chance or skill for money or other thing of value…”
However, the law also includes an exemption for “offers of prizes, award or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength, or endurance or to the owners of animals or vehicles entered in such a contest.”
Chris Grimm, who lobbies for the Fantasy Sports Trade Association, responded that fantasy sports contests are nearly 100% skill because “the level of skill that goes into building the lineups is very high. You have to be incredibly knowledgeable about the game, about the matchups.”
Both sides have a point, and the resolution will probably come down to how the state defines fantasy sports contests in relation to that aforementioned exemption. On one side, the AG’s office takes the position that the exemption does not apply. Fantasy sports contestants are not participating in sporting events themselves and thus shouldn’t be able to receive monetary rewards. Doing so clearly meets the state’s definition of illegal gambling.
On the other side, the DFS industry feels that participating in a fantasy league is itself a competition of skill. They argue that rewards are not paid out based on athlete’s performances in contests; the fantasy contest all by itself is a contest of skill between people who are tasked with drafting lineups and researching upcoming games.
It’s not clear if Friday’s statement from the AG’s Office will have any immediate affect on the Veromont daily fantasy sports industry. So far, the state has taken no legal actions against the major fantasy providers and neither DraftKings DFS nor FanDuel DFS have added Vermont to their list of restricted states.
Wes Burns has more than a decade’s worth of experience as a writer, researcher and analyst in the legal gambling industry and is co-founder of BettingUSA.com. As a former professional online poker player, Wes approaches his work from the viewpoint of players.
