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Running head: FANTASY FREEDOM

Fantasy Freedom for Minors: An Examination of Gambling Law as it Applies to Minors with

Fantasy Sports

Justin Jahn

Legal Studies Academy


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Abstract

This paper is going to be about Minors participation in fantasy sports. It will show research

about laws in Virginia as well as New York, a battleground state for fantasy sport gambling. The

paper will also discuss cases dealing with individuals and fantasy contest sites, and the state's

legal disputes against the fantasy sites. This paper also proposes solutions to the issue of minors

participation in fantasy sports as it becomes more popular.

Keywords: fantasy sports, participants, Minors, Of-age individuals, Underage individuals,

Gambling, and Contests.

Fantasy Freedom for Minors


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57.4 million and counting participate in a computer generated strategy based sports game

utilizing actual athletes annually, and their success is completely based on those athletes

achievements ("Study: Growth of Fantasy Sports Participation Flattens out," 2016). Fantasy

sports have become a worldwide hobby in the past decades. With the overall interest increasing,

interest by individuals under legal age is also increasing. Minors admit to and are proud to play

numerous fantasy sports. As legislation allowing fantasy sports contests becomes more common

in the Unites States, the availability of fantasy sports will be more prominent and so will the

ability to make bets, making non-wagering options to allow minors participation will continue

to grow fantasy sports as a business, and as a pastime.

History of Fantasy Sports

Fantasy sports began sometime in the 1980s with a select few participating in fantasy

baseball, and tallying all scoring statistics by hand from a sports magazine (Baker 2011).

Baseball was the first fantasy sport introduced to the public, followed by fantasy football in 1984

(Baker 2011).

Public Reception

The introduction of fantasy sports were found to be exciting pastimes, fantasy football,

which was introduced in 1984. According to Baker from 1984 to 1999 fantasy sports had begun

their dynastic rule over Americas media, and a regular headline (2011). Fantasy sports have

grown exponentially since then, participation totaling over 57 million, Gouker, an author who

researched fantasy sports and their participants, states that the exponential growth of participants

in fantasy sports growth has met its limit, and he anticipates that with the promotion of daily

fantasy sports will soon decline, based on ad projections averaging in the hundreds of millions of
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dollars per year, fantasy sports will cease the incredible growth as seen since its introduction in

1984 (Gouker, 2016).

Gambling Overview

Gambling is defined in the Jurisprudence of Virginia and West Virginia as the unlawful

wager of goods or moneys in order to have a chance to win a prize or other award (1948). The

different variations of gambling can be broken up into two sub categories known as games; these

games are known as a game of chance, and a game of skill (1948).

Game of Chance

A game of chance is defined as an inherently illegal gambling game, such as in the case

of a lottery, there is no ability to increase your chances for winning, no skills are present only

luck ("Gaming and Gambling Contracts," 1948). Games of chance are impossible to get an edge

up on competition as no expertise or experience in any such field can control the outcome.

Games of chance can include the lottery, flipping a coin, rolling a die, and even roulette.

Game of Skill

A game of skill is defined as a skill game until a wager is made upon it which makes it

gambling, golf, basketball, and football are all games of skill that are only made gambling when

wagers are made upon an outcome ("Gaming and Gambling Contracts," 1948). A wager has to

in the workings for the game of skill to be considered gambling, if not it's just a game played for

enjoyment. Unlike the game of chance, the game of skill can be skewed in favor of a player

based on their experience, talent, or knowledge of the game Gaming and Gambling Contracts.

(1948). Games considered games of skill include: blackjack/ 21, chess, checkers, and assorted
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domino games. Fantasy sports should be categorized under the game of chance; however when

wagered upon of any amount, fantasy sorts becomes gambling, but without a wager it a game of

statistics and research to create the most favorable lineup of players in order to win a game or

match.

Fantasy Sports

A fantasy sport, according to CNN, is the assembling of actual athletes from a sport

grouped together in an online database, and these teams play each other and statistical success of

each player determines points, and there for a winner ("Fantasy Sports: What Is It, Anyway?,"

2015). The most popular fantasy sport is fantasy football with 33 million participants annually

(Steinberg, 2014). The annual fantasy sport participation is said to be around 47,835,000 people,

and 8,610,300 of those participants are minors between 12-17, which means that 34.4 percent of

United States minors participate in fantasy sports annually (Ruihley, Billings, & Rae, 2014).

Participants

Reasons for participating in fantasy sports vary by age and demographic, but nonetheless

there are over 57.4 million fantasy sports participants in the United States ("Study: Growth of

Fantasy Sports Participation Flattens out," 2016). The reasons for taking part in fantasy sports

can range from a hobby to do with friends to pure competition and the want to win (Ruihley,

Billings, & Rae, 2014). Of the millions of those who participate in fantasy sports, the bulk may

be adults, but the future of the fantasy sports is in the teen and pre-teen age group (Ruihley,

Billings, & Rae, 2014).

Adults role. The most prominent demographic playing fantasy sports consistently year

in and year out are adults. Adults play mainly for passing time, as surveys show from the adult
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demographic, but they also consume the most sports media, averaging four point two hours a

week. Younger adults age 18 through 35 report that they play for more entertainment and

enjoyment reasons (Ruihley, Billings, & Rae, 2014). Billing and Ruihley have broken the

reasons to participate in fantasy sports into 10 dimensions: arousal, camaraderie, competition,

control/ownership, escape, fanship, pastime, self esteem, social sport, and surveillance

(Ruihley, Billings, & Rae, 2014).

Minors role. The underage community, the ignored demographic, has been a silent

participant; professionals admit to playing fantasy sports when they were underage, David Gonos

has stated (D. Gonos, Personal communication, November 22, 2016). Although not documented,

it is estimated that the top reasons minors participate are: ownership, passing time, social

reasons, camaraderie, and keeping in touch with friends (Ruihley, Billings, & Rae, 2014).

Playing a Fantasy Sport

A fantasy sport should be permitted to be played by any individual who wants to participate,

gambling on fantasy sports should remain of legal gambling age. Playing out of pure enjoyment

should be permitted for individuals of any age range. Playing is simple. The user must login to

any fantasy website, choose the sport they wish to participate, and then are shuffled into a league

in which they draft desired players for their rosters. For example, in standard fantasy football

leagues, a roster includes a quarterback position, two running back positions, two wide receiver

positions, a tight end position, a defense and special teams position, a kicker position, and a flex

position. The flex position is just that, flexible, so it can be used to play either a running back, a

wide receiver, or a tight end. Succeeding in fantasy football is based on a player's ability to set

the most favorable lineup for each match. For example, the most favorable lineup would be one
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with players scoring multiple statistics, scoring a majority of fantasy points, and a lineup with

least injury to easiest opponent ratios. An athlete with no injury, an easy opponent, and

statistically scores well consistently would be a prime candidate for a lineup.

Fantasy Sports Skills

Skills applied to fantasy sports range from patience to statistics and everything in

between, a fantasy sports participant's best chance to be successful is to perform a technique

that mixes research and basic statistics. Purdum, of ESPN states that players with the most

usage in their sport, and the easiest opponents are more likely to succeed for a fantasy team.

The difficult part of successfully completing this method is finding players who play a good

portion of the game, who score considerable amounts in limited time, and who have opponents

that in the past have allowed for big games statistically for a player (Purdum, 2015).

Law

As some fantasy sports participation can be seen as gambling, if a wager is placed, then

states must have regulations, just as the federal government does when it comes to the topic of

gambling. A major question posed in this paper is whether fantasy sports, without a wager, are

considered gambling, and if it is not gambling, then minors should be permitted to participate

without having to provide identification or proof of age.

Virginia Law

The state of Virginia defines gambling as making a bet or wager in the commonwealth

of Virginia with the intent of winning a prize or thing of value ("Gaming and Gambling

Contracts," 1948). According to the Virginia law, gambling is a Class three misdemeanor, a 500
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dollar fine, and no way to collect on an illegal gambling contract ("Gaming and Gambling

Contracts," 1948). The Virginia code does not specify whether fantasy sports are games of skill

or chance. There is evidence leading many to believe that fantasy sports are games of skill

because of the statistics and research given, and based on that majority, the participation in

fantasy sports should be allowed across the board age wise, as long as no wager of money or a

prize of value is at stake.

New York Law

The reason for including New York's law on this topic is because of its strict similarity to

Virginia code. The definition of New York gambling is near identical to that of Virginia, the

exception being the explicit difference between a game of skill, and a game of chance. In New

York law a game of chance is ruled completely by variables of the game itself, while a game of

skill can be played better or worse based on attention, skill, and experience of a participant

("Gambling and Gaming Contracts," 1979). New York has been a battleground for this topic in

the past years. New York still holds that fantasy sports are a game of chance because players

don't have control over the outcome of the game, and New York sustains that this violates the

Unlawful Internet Gambling Enforcement Act of 2006 (Statt, 2016).

Legislation

Virginia became the first state to officially legalize the practice of daily fantasy, and overall

fantasy sports gambling (Statt, 2016). The Fantasy Contest Act allows fantasy contest gambling

on all fantasy sports on daily fantasy website and year or season long fantasy sites. The final

decision came with a distinctive opinion. The Virginia law will read that fantasy sports will be

considered a game of skill, thus allowing the state to allow its operation (H.R. 59.1-556, 2016).
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According to Nick Statt of The Verge, a news website about the modern world and important

social issues, Virginia would pass the bill, but only with the activation of policies that would

ensure all gambling participants would be 18 or older (Statt, 2016). The groundbreaking decision

in Virginia came with other regulations including a $50,000 payment to Virginia for operation,

policies to deter underage gamblers, and employees could not participate in contests from their

own sites (Statt, 2016). While the new bill seems to have many happy according to Statt,

smaller season-long companies may be forced out of Virginia entirely, because of the $50,000

fee (2016).

In New York only just recently has there been a stay in legislation. Fantasy contest sites have

been allowed to continue to operate within the state boundaries of New York, a decision most

didnt feel was forthcoming (Statt, 2016). Until the appeals process and a final decision has been

made in an upper court, operation will continue without further regulations (Statt, 2016).

The national legislation, the Unlawful Internet Gambling Enforcement Act of 2006, concerns

itself with the knowing transaction of money or prizes from a gambling contract that occurred

or involved the use of the internet ("Unlawful Internet Gambling Enforcement Act of 2006,"

2006). Specifically the act dealt with games of chance occurring on the internet, as a game of

skill can be won or manipulated by factors of the person participating. The distinction game of

skill is what allows states to pass laws allowing fantasy contest gambling. If the state recognizes

fantasy sports as a game of skill, they can pass legislation permitting it (Statt, 2016).

Court Cases

The case of Miller v. Draftkings took place in Greene County, Tennessee, and it was

brought to court by a wife who wanted to recover the online gambling losses of her husband. She
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claims her husband lost $46,400, and wants DraftKings, a well-known and documented daily

fantasy contest website, to reimburse them that money. A Tennessee judge remanded the case to

remain at the state level, and not proceed to federal level (Miller v. Draftkings). Tennessee is a

state that has passed legislation permitting fantasy contest gambling, so the wagers themselves

occurred legally, so the issue in question is exactly how much the couple is claiming to recover

("Which Daily Fantasy Sports Sites Allow Which States?," 2016). DraftKings moves to have the

case heard at a federal level because of the consistency they make judgement on, they will follow

the state legislation as it is read and make a decision (Miller v. Draftkings). If one were to make a

decision on this case, it would be to force Miller to pay his losses because of the legality of

fantasy contest in the state.

The case of New York vs. DraftKings & Fanduel deals with the ongoing legal disputes

between the state of New York and the fantasy contest websites attempting to operate within

them ("Fanduel, Draftkings Win Stay, Can Remain Open in New York"). While a final decision

has not been made on the permanent allowance of fantasy contest gambling websites in New

York, a permanent stay was granted to continue taking business from residence of New York

throughout the appeal process and until a final decision has been made ("Fanduel, Draftkings

Win Stay, Can Remain Open in New York"). A main issue within this case is the overarching

question, are fantasy sports considered a game of skill or a game of chance. The communications

Director to the New York Attorney General, Damien LaVera, states,

Having already obtained a preliminary injunction against these companies, we look forward to

demonstrating to the appellate division that the trial judge was correct. DraftKings & FanDuel
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are indeed operating illegal gambling operations in New York and should be permanently barred

from doing business in New York. (2016)

The individual quoted believes that fantasy sports should be deemed illegal in the state of New

York. He has the entitlement to have this opinion, but as the courts have already stated through

their stay, they believe the decision will be reached that deems fantasy sports as a game of skill.

In a unique case in Miami, Florida, occurred in August of 2015, when fantasy sport

contests were popular, but no legislation had been applied to them besides the Unlawful Internet

Gambling Enforcement Act of 2006 which made all internet gambling on games of chance

illegal. In the case of Jose Aguirre vs. DraftKings, the issue was the promise of matching an

initial deposit, but actually the company only matched a set amount, thus leading to a false

advertisement suit (Blitz, 2015). The case became a precedent in which one of two things would

occur if Mr. Aguirre won. Then DraftKings would be forced to pay out considerable amounts of

money to all those who did not receive full payment, but if DraftKings won then suing them

would become a formality as a precedent would stand in their favor (Blitz, 2015). It was decided

that the case would be heard in DraftKings originating state, and Mr. Aguirre dismissed the suit

(Jose Aguirre vs. DraftKings inc).

Court Case Conclusion

The court cases shown in this paper are those meant to show that the fantasy sport contest

sites are reputable. The fantasy sport contest sites are eager to be get legislation passed in all

states across the United States, while most states will most likely pass the bills necessary for

these sites to remain in operation, it will be a focal point of each state to create regulation in

order to secure safety for all participants as well as limit the chances for under age individuals to
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participate in legal gambling ("Which Daily Fantasy Sports Sites Allow Which States?,"

2016)(Statt, 2016).

Fantasy Sports Game Classification

Using both Virginia and New York codes considering gambling, and both being so

similar, the logical classification for fantasy sports is a game of skill. According to David Gonos

of socalledfantasyexperts.com, fantasy sports can be played and enjoyed without a prize or

wager, and he firmly believes playing successfully requires skill, and experience (D. Gonos,

Personal communication, November 22, 2016). Under the Unlawful Internet Gambling

Enforcement Act of 2006, for fantasy sport contest sites to be legally wagered on they must be

deemed games of skill. Virginia has permitted, with regulations, the use of fantasy contest

wagering, thus setting the precedent that fantasy sports should be considered a game of skill.

Professional Point of View

David Gonos, the co-owner of socalledfantasyexperts.com, has participated in fantasy

sports since the beginning of their rise to mainstream level, and he began with fantasy football in

1989, and has expanded to playing fantasy baseball, basketball, and hockey (D. Gonos, Personal

communication, November 22, 2016).

Professional Career

Mr. Gonos has been a participant of fantasy sports for 27 years, and currently co-owns

and operates a website that specializes in assisting fantasy sports players with everyday fantasy

issues such as: Line-up selection, players to acquire, trade deal evaluation, and draft assistance
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(D. Gonos, Personal communication, November 22, 2016). David Gonos has been assisting

fantasy players since the creation of his website with his partner (D. Gonos, Personal

communication, November 22, 2016).

Opinion on the Issue

Mr. Gonos has said that fantasy sports should be permitted for kids and adults of all

ages, every fantasy website should have a selection that doesn't require a bet, or wager,

somewhere a kid or teen can play just for the fun of playing. Gonos went on to say minors are

the future of fantasy sports, there are more playing every year and those kids will one day have

kids who will play fantasy sports, so the fantasy sport industry won't stop growing, it will

continue to grow as it has since it has since its introduction (D. Gonos, Personal

communication, November 22, 2016). Mr. Gonos opinion is one supported by many fantasy

sport enthusiasts. The freedom for minors to participate seems a small issue but could lead to

detrimental effects to the fantasy sports business if not allowed. As his experience and success

might show, Mr. Gonos is a highly respected and well establish professional in the world of

fantasy sports, and his opinions matter to thousands every week they go to his website for

advice; therefore, his opinion on the issue of minor participation in fantasy sports should be

taken seriously, and thought of as expert advice (D. Gonos, Personal communication, November

22, 2016).

Proposed Solutions

Fantasy sports gambling is becoming an everyday topic. Media and legislation have made

it so, the issue to be solved in this paper is how to allow safe and legal options for minors to

participate in fantasy sports. Minors cant participate in the same manor that of-age individuals
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do they are not 18 years old and dont have the ability to legally gamble ("Gaming and Gambling

Contracts," 1948). The passed legislation already calls for precautions to be placed on fantasy

sports sites to deter under age individuals from gambling illegally, these include identity

verification when applying for a contest, in which participants have to input I.D. numbers to

verify age.

Separate No-Gambling Sites

The first solution would be to create non-gambling fantasy websites in which under age

individuals could still participate in fantasy sports while not violating any gambling law, and

would also allow a non-gambling alternative for new participants and those who wish to

participate but not gamble. These sites, completely void of gambling, would be much more user

friendly, because no account settings to distinguish age as all contests would be purely

enjoyment without wagers.

Built in Non-Gambling Contest

The second option would be to have specific contest set for underage individuals on

every fantasy contest website, as suggested by David Gonos, all fantasy sports sites should offer

an option for minors to choose so they can still participate without worrying about illegal

gambling (D. Gonos, Personal communication, November 22, 2016). This solution would be

simple to maintain as it is only an addition to current sites, and these non- gambling contests

would be played by any individual not wanting to gamble as well as underage individuals, and

still allows the enjoyment of participation in fantasy sports. It would secure that no underage

gambling would occur because as with all fantasy contest sites, players must input account

information, and when signing up an individual must select age and then an I.D verification
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number. If the participant is not of age or cannot produce an of-age I.D verification, that

individual's account would be limited to non-gambling contest only.

Conclusion

The rise of fantasy sports contests across the United States is growing, with over 50

percent of states allowing full access to fantasy sports contests ("Which Daily Fantasy Sports

Sites Allow Which States?," 2016). The more available legal fantasy sports gambling is, he more

likely minors will have a desire to participate. Minors are the future of the fantasy sports industry

and should be permitted to participate, but not gamble. The opinions of countless bloggers and

professionals such as David Gonos, a website owner and fantasy sport professional, are

unanimous. Minors should be given the opportunity to participate in fantasy sports. The

guidelines are already in place in states that have permitted gambling to ensure under age

individuals cannot gamble, so every site should have an underage option so the 12 to 17

demographic can participate within the law (H.R. 59.1-556, 2016). This paper, through intense

research and investigation, has come to find that fantasy sports are in most cases becoming a

legal contest for gambling. Even with the Unlawful Internet Gambling Enforcement Act of 2006,

they are becoming legal and in everyday practice in many states. The Underage or Minors role

in fantasy sports is still unclear but leaning to a restricted form, and this paper provides evidence

showing minors are the future of the fantasy sports industry, along with an expert opinion stating

that a special option should be present on every fantasy sports site that can be accessed that

allows someone to play without betting or wagering. All are in favor of promoting a way for

minors to continue to participate(D. Gonos, Personal communication, November 22,

2016)(Ruihley, Billings, & Rae, 2014). If legislation continues to be passed at the rate it is in
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favor of fantasy sports, then the necessary steps should be taken to ensure minors can participate

without having to be of- age, but not permitted to participate in the gambling of fantasy contests.

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