Fantasy Sports: Between Gambling and Skill

How do you define “gambling”? Well, if you look it up in the dictionary, the first definition to pop into your eyesight is “play games of chance for money”. “Games of chance” translate to completely random games, like the slot machines at All Jackpots, for example, that are completely random (and have the papers to prove it). This is how they are supposed to be. Those who join the fun with this action-packed cricket game called Cricket Star or choose any other slots game at All Jackpots can expect to play a game that’s absolutely random, with nothing they (or the All Jackpots, for that matter) can do to influence its outcome.

Things are different in the case of other similar activities, like sports bets, and fantasy sports. These are seen as “gambling” by regulators and policymakers because they involve spending money on “activities with an uncertain outcome”. Note that the term used is “uncertain”, not completely random – which is a term that best describes sports and fantasy sports alike.

Fantasy sports, in special, have been compared to stocks trading, not because of the uncertainty factored in (even though stocks trading can be a surprising endeavor at times) but because of the manner, they are practiced. Originally, stock trading was a long-term investment based on skill, focused on compound earnings over a long time – until day trading came along, shifting focus toward the “exciting and immediate” practice of taking short-term financial risks. Similarly, fantasy sports was originally a season-long game based on the actual performance of players – and daily fantasy sports turned it into a short-term activity with the results coming in at the end of the day. As such, the risk is higher – and so is the excitement.

But is daily fantasy sports a form of gambling?

Well, from a regulatory point of view, it is – and it isn’t, depending on who you ask. In some US states, DFS is considered a game of skill, without the need of regulation. Sports leagues also embrace it, as opposed to sports betting, which most of them are against to this day. The federal legislation of the US also considers DFS not to qualify as gambling, even if some states require DFS operators to obtain a license from their gambling regulators to be able to offer their services to the locals.

When FanDuel, one of the biggest DFS operators in the US, entered the UK market, it had to obtain a license from the UK Gambling Commission first. Which, considering that the UK has one of the biggest gambling markets in Europe, says a thing or two about the nature of the activity.

Whether or not DFS is a form of gambling is still something left to be decided. It is different from what the textbook definition of gambling looks like, that’s for sure. And the rest depends on the regulators on one hand, and the players on the other.