Is DFS Gambling?

[revo]

As many states want to get their hands on the golden goose, DFS finds itself possibly on the edge of obliteration. Nevada recently ruled it was considered "gambling" and a court case brought up by the NY State AG is also arguing the same.

For those who don't play, Daily Fantasy gives you a salary cap in which to build a lineup from all of the players going that day, and awards points (negative and positive) for certain statistics. You then compete against others for prizes, with the high scores winning. The sites take a rake of up to 12% for hosting the games.

The sites and its players are arguing it's a game of skill; the states are arguing it's a game of chance. Where do you stand?


As a sporadic DFS player the last three years, I can certainly see both sides of the issue. It's certainly a helluva lot more than pulling a lever at a slot machine -- noobs will get housed in any DFS game in due time. In order to be successful, you have to know nuances of the various sports only someone who has done a TON of research would know, such as lefty/righty splits, pitcher vs batter matchups, ballpark tendencies, football defensive ratings and stats, etc. It's far more than just plunking down Tom Brady and filling out the rest of your lineup in 2 minutes.

But, on the other hand, we can't control if a player will get hurt; or if a game will be rained out; or if a guy hitting .350 will pull an o-for-4 that night. All signs pointed to the Eagles getting trashed by the Pats last Sunday, but the Eagles won. Who knew? And like Francesa argued, horse racing enthusiasts also have to know a ton of stats on horses, and that's considered gambling since as much as we may know we still can't control the outcome, especially not one of a horse. Yet there are great horseplayers, too.

So as much as I'd like to think you can control your destiny by picking savvy lineups, you still can't control the outcome, and therefore it has to be considered gambling. I'd lean it 55% chance, 45% skill, so there's one man's opinion. What say you?

[johnnya24]

If you put down money to win a prize it's gambling. It may also be a game of skill ... it may be a game of extreme skill ... but it's still gambling. Even if you were to say it's 90% skill, it's still gambling.

Poker is a skill game, but it's still gambling. The debate with poker had more to do with poker being a game of skill rather than a game of pure chance like typical casino games. The argument is that the ban on online casino games should not include poker because it is primarily a skill game with chance being of secondary importance ... but still gambling.

So I guess in that regards, DFS falls into the same category as poker. Unquestionably gambling.

Heck, buying a stock is gambling, buying a second hand car is gambling, loaning money is a gamble.

[revo]

If you put down money to win a prize it's gambling. It may also be a game of skill ... it may be a game of extreme skill ... but it's still gambling. Even if you were to say it's 90% skill, it's still be gambling.

Poker is a skill game, but it's still gambling. The debate with poker had more to do with poker being a game of skill rather than a game of pure chance like typical casino games. The argument is that the ban on online casino games should not include poker because it is primarily a skill game with chance being of secondary importance ... but still gambling.

So I guess in that regards, DFS falls into the same category as poker. Unquestionably gambling.

Heck, buying a stock is gambling, buying a second hand car is gambling, loaning money is a gamble.

If we Vintage Drafted for a monetary prize, is that gambling?

[Lurker765]

How do you define gambling?

Is it:
verb (used without object), gambled, gambling.
1.
to play at any game of chance for money or other stakes.

Or is it:
Gambling is the wagering of money or something of material value (referred to as "the stakes") on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Gambling thus requires three elements be present: consideration, chance and prize.

or perhaps:
A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome. Gambling does not include bona fide business transactions valid under the law of contracts, such as the purchase or sale at a future date of securities or commodities, contracts of indemnity or guaranty and life, health or accident insurance.

Is the lottery gambling? Is the stock market gambling? Is hold em poker gambling? Is parimutuel horse racing gambling? Is home insurance gambling?

The definition of gambling varies considerably from state to state from what I can tell. All states say that insurance and the stock market isn't gambling. Many states don't legislate that the lottery is gambling when it obviously is.

All states (I think) believe that season long fantasy sports is not gambling. Some states think that daily fantasy sports by those same people drafting the same players (to start with) is not gambling.

Given all the definitions of gambling I can find it appears that DFS meets the three criteria for gambling, but then again so do many other activities that somehow are not considered gambling. Why those aren't considered gambling and DFS would be seems to be an issue of greasing the right palms.

[The Feral Slasher]

If we Vintage Drafted for a monetary prize, is that gambling?

I loved this question, although only a few of us probably appreciate it.

[griswold]

I believe DFS is gambling as well and basically for the same reasons as you guys mentioned.

It's the same concept as horse racing, poker, blackjack, etc.

It definitely has skill involved BUT you can't control it.

I've played it but I don't like it.

The creation of Fantasy football was to "act out being a team GM".

To compete against friends, family, etc. and be excited to watch another team/players than your home team.

That's why I play.

[heyelander]

I don't see how it is any different than betting straight up games, so yeah, it's gambling. I think the deciding factor should be with the method. If there is a house that isn't putting it's own money up, just taking a cut of other people's actions, then there should be some regulation.

[revo]

Even though I have won about $4k on Fanduel and have never deposited my own money, ironically my biggest score came in my initial money play, where I won $750 on a $2 GPP entry. In this instance I did no homework, had no real idea about the type of game I entered, and used a largely "season-long" attitude about players, but still finished 1st in a 20,000-large tourney.

I don't see how it is any different than betting straight up games, so yeah, it's gambling. I think the deciding factor should be with the method. If there is a house that isn't putting it's own money up, just taking a cut of other people's actions, then there should be some regulation.

Yes, this summer's shenanigans proved regulation was necessary, but the real question is whether it's gambling or not.

[Lucky]

One thing we have generally agreed about season-long leagues...even with a good draft, in-season roster management is crucial. Substitutions, waiver claims or free agent purchases, strategic trades...all of these combine to make for a competitive team. With a DFS, all you have is the draft. Plus, you don't even have the money management skills required for an auction or the talent management skills required for a straight draft, because in a DFS everybody can have Tom Brady.

So, while both the season-long leagues and the DFS combine skill and chance, it seems to me that the former lean much more heavily toward skill, while the latter rely much more heavily on chance. This may be why various jurisdictions have found season-long fantasy baseball to be a game of skill rather than illegal gambling.

And by the way, no state has determined that a lottery is not gambling. They have just made it legalized gambling. Like horse racing is legal in many states.

(Sometime I'll tell you how I (essentially) had charitable "casino nights" abolished in the State of Texas as being illegal gambling. I became very popular with the Junior League.)

[Controller Jacobs]

...
Heck, buying a stock is gambling, buying a second hand car is gambling, loaning money is a gamble.

The individuals that have a financial interest in fantasy sports being legally labelled as gambling would never say the same about stocks.
Relatively speaking, I feel much more confident that someone can place an informed, fair wager on baseball than on any stock.

What is most casino-like about daily fantasy baseball is that a loss is total, and not recoverable with time. That does not apply to Keeper leagues, where one can lose but improve their future chances via trades, fa pickups.

[joncarlos]

What is most casino-like about daily fantasy baseball is that a loss is total, and not recoverable with time. That does not apply to Keeper leagues, where one can lose but improve their future chances via trades, fa pickups.

So a season-long non-keeper league is gambling?

I like Heye's definition.

If there is a house that isn't putting it's own money up, just taking a cut of other people's actions, then there should be some regulation.

[baldgriff]

The stock market is the biggest gambling game in the world - but it is so much the fabric of our society people dont want to face that fact.

[Lucky]

I don't see how it is any different than betting straight up games, so yeah, it's gambling. I think the deciding factor should be with the method. If there is a house that isn't putting it's own money up, just taking a cut of other people's actions, then there should be some regulation.

Taking a cut of other people's action is what constitutes being a "gambling house" in many jurisdictions. That's why the Thursday night poker game with friends is not considered illegal, since everyone plays with their own money and the house doesn't take a cut.

[revo]

The stock market is the biggest gambling game in the world - but it is so much the fabric of our society people dont want to face that fact.

The "gamble" aspect of the stock market is based purely on time horizon and diversification. If you pick one stock or one fund to hold for one month or one year, sure, it's gambling. But if you pick a group of 10 diversified funds over 10 different asset classes and hold them for 5, 10, or 20+ years, you'll almost certainly be up over any of those time periods since the stock and bond markets began. Can you say the same if you sit at the blackjack table or played DFS for 5 years, 10 years, etc.?

[johnnya24]

The "gamble" aspect of the stock market is based purely on time horizon and diversification. If you pick one stock or one fund to hold for one month or one year, sure, it's gambling. But if you pick a group of 10 diversified funds over 10 different asset classes and hold them for 5, 10, or 20+ years, you'll almost certainly be up over each of those periods over any of those time periods since the stock and bond markets began. Can you say the same if you sit at the blackjack table or played DFS for 5 years, 10 years, etc.?

Same argument with poker ... a good winning player will always win over the long run even if there is short term variance. Still gambling even if the expectation is that you will almost certainly win over the long run.