S avannah

Law Review VOLUME 4 │ NUMBER 1

Betting on Skills for Fantasy Sports Travis Heller*

I. Introduction Cam Newton, Joseph Randle, Devonta Freeman, DeAndre Hopkins, Keenan Allen, Steve Smith, Sr., Greg Olsen, and Stephen Gostkowski: this is not just a random assortment of players in the NFL. These players (as well as the Seattle Seahawks’s Defense/Special Teams) make up the FanDuel million- dollar winning lineup for Week three of the 2015 season.1 The winner of this lineup paid a fee to enter FanDuel’s million-dollar tournament, created his lineup, and subsequently became a millionaire after the Monday Night Football game between the Green Bay Packers and the Kansas City Chiefs ended the round of NFL games for that week and the scores were finalized. Unfortunately for this winner, and the thousands of other Daily Fantasy Sports (“DFS”) participants, this type of game is coming under legal attack.2 Daily Fantasy Sports is a newer take on traditional fantasy sports.3 Participants pay an entry fee to enter a contest and then go on to assemble a team of players called

* Juris Doctor, Savannah Law School. 1 Joe Pisapia, Lineup Lookback: Breaking Down Week 3’s Sunday Million Winning Lineup, FanDuel Insider (Sept. 29, 2015, 9:24 AM), https://www.fanduel.com/insider/2015/09/29/lineup-lookback-breaking-down-week-3s- sunday-million-winning-lineup/. 2 Jason M. Breslow et al., Is It Gambling? How States View Daily Fantasy Sports, Frontline (Feb. 8, 2016), http://www.pbs.org/wgbh/frontline/article/is-it-gambling- how-states-view-daily-fantasy-sports/. 3 See Scott Kirsner, Two Local Companies, StarStreet and DraftKings, Prepare to Launch New Fantasy Sports Sites, Boston.com (Feb. 27, 2012, 3:30 PM), http://www.boston.com/business/technology/innoeco/2012/02/two_local_companies _starstreet.html (discussing the founding of DraftKings); see also The Birth of Daily Fantasy as We Know It, FanDuel, https://www.fanduel.com/about (last visited Mar. 12, 2016) (discussing the founding of FanDuel); Regis Behe, Fantasy Sports Leagues Put Armchair in the Game, TribLive, (Dec. 14,

273 Savannah Law Review [Vol. 4:1, 2017] a “lineup.”4 Participants earn points based on how their chosen lineup performs that week.5 After the week is over, the person in the contest who has the most points is declared the winner, and participants then must pay another entry fee in order to enter the contest for the next week, repeating the process.6 This format differs from typical, season-long contests in which participants compete over the course of a whole season with relatively the same teams. The game exploded in popularity for the 2015 NFL season following an aggressive advertising campaign.7 That explosion in popularity, however, did not go unnoticed. State governments, attorney generals, and regulatory boards across the country are coming out against DFS claiming that it constitutes illegal gambling.8 Hundreds of millions of dollars were spent during the 2015 NFL season on DFS,9 and these governmental agencies should of course do their due diligence to ensure the protection of the public from illegal gambling. DFS, however, is not illegal gambling under United States federal law. Furthermore, in most states, games that are predominantly based on skill are not considered illegal gambling.10 Thus, if it can be shown that DFS is a skill-based game, then it should not be considered illegal gambling under both federal law and the laws of those states. The predominant law used to defend the legality of DFS is the Uniform Internet Gambling Enforcement Act of 2006 (“UIGEA”).11 Congress carved out an exception for fantasy sports so that they would not be considered internet gambling under federal law.12 While states still hold the authority to determine if fantasy sports constitute illegal gambling within their borders, the UIGEA offers federal protection to the industry. This article explains why DFS should be seen as games of skill under federal law. Part II of this essay provides an overview of the UIGEA and how it pertains to DFS. Part III explores how DFS are predominantly games of skill. Finally, Part IV explains the current public perception of the DFS industry.

2002), http://triblive.com/x/pittsburghtrib/ae/s_107741.html (describing the birth of fantasy sports on the Internet). 4This Is How You FanDuel, FanDuel, https://www.fanduel.com/how-it-works (last visited Oct. 17, 2017); How to Play, DraftKings, https://www.draftkings.com/help/how-to-play (last visited Oct. 17, 2017). 5 Id. 6 Id. 7 Myles Udland, Fantasy Sports Companies Spend so Much on Commercials They're Moving the Needle on TV Ad Spending, Business Insider (Oct. 6, 2015, 2:56 PM) http://www.businessinsider.com/draftkings-fanduel-daily-fantasy-sports-advertising- 2015-10. 8 See Breslow, supra note 2. 9 Max Miceli, Betting on the Fantasy World, US News (Oct. 30, 2015, 1:01 PM), http://www.usnews.com/news/articles/2015/10/30/draftkings-fanduel-and-gambling- on-the-world-of-fantasy-sports. 10 See Anthony N. Cabot et al., Alex Rodriguez, A Monkey, and the Game of Scrabble: The Hazard of Using Illogic to Define Legality of Games of Mixed Skill and Chance, 57 Drake L. Rev. 383, 390–94 (2009). 11 31 U.S.C. § 5363 (2006). 12 31 U.S.C. § 5362(1)(E)(ix) (2006).

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For the purposes of this article, any time that DFS is mentioned, the NFL is the only professional sport being discussed, as it has been the primary focus of this debate, even though there are DFS contests for several other sports, including MLB, NBA, or NHL.13 The term “participant” will mean those people that pay the entry fee to compete on DFS service websites. The word “player” will be defined as an NFL athlete who is chosen to be on a participant’s lineup.

II. Current Legal Situation of Daily Fantasy Sports Navigating the legality of DFS requires analyzing the impact of both federal and state laws. The primary federal law impacting DFS is the 2006 Uniform Internet Gambling Enforcement Act (“UIGEA”).14 Each state has different interpretations of what constitutes gambling, but most states simply require the showing that an activity has consideration, reward, and chance.15

Uniform Internet Gambling Enforcement Act The UIGEA represents Congress’s attempt to crack down on Internet gambling that involves the transmission of bets and wagers across state lines.16 The act defines “unlawful Internet gambling” as “plac[ing], receiv[ing], or otherwise knowingly transmit[ting] a bet or wager by any means which involves . . . the Internet where such a bet or wager is unlawful under any applicable Federal or State law . . . in which the bet or wager is initiated, received, or otherwise made.”17 Furthermore, even if a business provided a service that would not constitute illegal gambling under the UIGEA, if the state where the business operates holds the service to be illegal gambling, then this Act will not protect the business from the state laws.18 There is, however, a specific exception allowed for fantasy sports in the Act.19 This exception states that a bet does not include participation in a fantasy sports event so long as that event meets three criteria: (1) any value awarded is made known to the participants before joining, and said value does not change based on the number of players;20 (2) all winning outcomes reflect the skill of the participants and are based on the statistical performances of individual athletes competing in multiple games;21 and (3) no winning outcome is based on the performance of a single game or on the performance of an individual athlete.22

13 See FanDuel, https://www.fanduel.com/ (last visited Oct. 17, 2017); DraftKings, https://draftkings.com/ (last visited Oct. 17, 2017). 14 31 U.S.C. § 5363 (2006). 15 See Cabot, supra note 10. 16 31 U.S.C. § 5361(a)(4) (2006). 17 31 U.S.C. § 5362(10)(A) (2006). 18 31 U.S.C. § 5361(b) (2006). 19 31 U.S.C. § 5362(1)(E)(ix) (2006). 20 31 U.S.C. § 5362(1)(E)(ix)(I) (2006). 21 31 U.S.C. § 5362(1)(E)(ix)(II) (2006). 22 31 U.S.C. § 5362(1)(E)(ix)(III) (2006).

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First Prong: Advertised Award Amounts The first prong of this fantasy exception states, “All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.”23 This accomplishes two goals. First, it prevents the total winnings from ballooning as more participants join, as is the case with a lottery. Second, it prevents fantasy site providers from advertising for a certain prize amount, only to decrease the amount if not enough participants join. Daily Fantasy Sites likely satisfy this prong. Both FanDuel 24 and DraftKings25 offer two kinds of games: guaranteed and non-guaranteed. A guaranteed game will never be cancelled, even if there are not enough participants to cover the winnings. A non-guaranteed game, however, can be cancelled and the entry fee refunded if not enough participants join. For example, if a DFS site offers a non-guaranteed game with a $10 participation fee and $500 in winnings, that site may cancel the game entirely if only forty people enter the game and the site is unable to cover the cost of the winnings. Cancelling the game entirely does not mean the value of the winnings changes, and likewise, no matter how many participants join the larger games, the advertised winnings will not increase. Because DFS sites advertise the amount of winnings which will result from a game prior to the game beginning, and because they do not change those amounts based on the number of participants, DFS sites satisfy the first prong.

Second Prong: Winning Outcomes Reflect Knowledge and Skill The second prong is the most debated, likely because it contains a highly subjective element. In order to satisfy this element, DFS sites must show that “[a]ll winning outcomes reflect the relative knowledge and skill of the participants.”26 When inserting this provision, Congress sought to create a protection for fantasy sports so long as the games being played were based on skill. The recent explosion of DFS, however, is not something that Congress took into consideration.27

23 31 U.S.C. § 5362(1)(E)(ix)(I) (2006). 24Rules and Scoring, FanDuel, https://www.fanduel.com/rules (last visited Oct. 17, 2017). 25 How to Play, supra note 4. 26 31 U.S.C. § 5362(1)(E)(ix)(II) (2006). 27 Sacha Feinman & Josh Israel, The Hot New Form Of Fantasy Sports Is Probably Addictive, Potentially Illegal And Completely Unregulated, Think Progress (May 7, 2015, 8:31 AM), http://thinkprogress.org/sports/2015/05/07/3648832/daily-fantasy- sports-gambling/(noting that Rep. Jim Leach, the author of the UIGEA, never intended to cover daily fantasy leagues. However, this is probably because DFS as we know it today did not begin until FanDuel was founded in 2009).

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The shortened period for DFS makes it a potential target under this provision.28 Unlike in a season long fantasy league in which the winner is decided after several weeks of making roster decisions, DFS puts the focus on choosing the lineup one time. Therefore, a slim possibility exists that a winning lineup could be randomly generated. This, however, is statistically unlikely and alone should not cause courts and lawmakers to decide DFS is gambling. Just because there is a slim possibility that something may occur does not automatically mean that it will. A player who studies trends in fantasy scoring, keeps up-to-date on all NFL activities, and creates an optimal lineup to fit under the salary cap should always score better than a randomly generated lineup. Another piece of protection from the second prong is that it does not state that the most skilled player should win every time, but only that “the winning outcomes reflect the relative knowledge and skill of the participants.”29 There are a number of variables that a participant must consider when setting a lineup: team depth charts, player statistics, injuries, weather, coaching styles, player progression, performances at home versus away, etc.30 To further compound the decision making process, the participants must find the optimal way to make all of their player selections fit under the league salary cap.31 By setting a lineup, that participant, even an inexperienced one, shows their “relative knowledge and skill.”32 If a participant does not take all these things into consideration, their lineup will likely not be successful. It should be noted that when analyzing this law, luck or chance is not mentioned in the statute.33 So long as each winning lineup can be traced to a player having relative knowledge and skill in DFS, then it fits the exception under the second prong. Just like in professional sports, the best team will not always win. There will be times where participants with a low winning percentage are able to best a participant who wins more often, but this should not be seen as an indication that luck is the predominant factor in winning. No participant will be able to win one hundred percent of the time, but the more knowledgeable and skilled ones will be able to increase their likelihood of winning through thorough preparation.

28 Marc Edelman, A Short Treatise on Fantasy Sports and the Law: How America Regulates Its New National Pastime, 3 Harv. J. Sports & Ent. L. 1, 38 (2012). 29 31 U.S.C. § 5362(1)(E)(ix)(II) (2006). 30 Why Fantasy Sports Is Not Gambling—It’s a Game of Skill, Fantasy Sports Trade Ass’n, http://fsta.org/research/why-fantasy-sports-is-not-gambling/ (last visited on Oct. 17, 2017). 31 See Daily Fantasy Football League Rule, Draftkings, https://www.draftkings.com/help/nfl (last visited Oct. 17, 2017) [hereinafter Draftking Fantasy Rules]; How it Works, FanDuel, https://www.fanduel.com/how-it-works (last visited Oct. 17, 2017) [hereinafter FanDuel Fantasy Rules]. 32 31 U.S.C. § 5362(1)(E)(ix)(II) (2006). 33 31 U.S.C. § 5362(1)(E)(ix) (2006).

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Third Prong: Restrictions on Player Selection The third prongs states that no winning outcome is based on the performance of a single game or the performance of an individual athlete.34 FanDuel and DraftKings directly address the third prong of the exception in their rules and guidelines for playing. FanDuel requires that participants choose players from at least three different teams with no more than four players coming from the same team.35 Alternatively, DraftKings only requires that a lineup must have players from at least two different NFL teams representing at least two different games.36 Both lineup restrictions allow for DFS site operators to satisfy this prong, even if FanDuel’s restrictions are a little more stringent. This is the easiest prong for DFS service providers to meet because they simply incorporate this exception into their rules.

III. Daily Fantasy Sports Outcomes Rely More Heavily on Skill Than Luck Because of the number of independent factors that participants must consider in playing DFS, the outcomes of those games will be reflective of each participant’s skill. The factors analyzed are knowledge of the scoring system in place, the initial setting of a lineup, and how each participant has an equal ability to set a winning lineup, and how diversifying the risk of one’s lineup leads to optimal results. Those factors do not represent every factor in the decision making process, but they do represent some of the most important. Generally, courts view fantasy sports that last the length of an entire professional season as involving more skill than luck.37 This could possibly be because the length of the season will negate any week-to-week player scoring irregularities, which can be seen as “lucky,” while also introducing additional elements of skill such as initiating trades with other participants,38 adding players from the list of available free agents,39 and dropping non-performing players from the team. Each of these additional skill tasks are seen as pushing season long fantasy leagues from the realm of primarily chance to one of primarily skill.

Knowledge of Scoring Rules One of the most basic skills a fantasy participant must know is how to recognize the different values of players depending on the scoring system in

34 31 U.S.C. § 5362(1)(E)(ix)(III) (2006). 35 Rules & Scoring, FanDuel, https://www.fanduel.com/rules (last visited Oct. 17, 2017) [hereinafter FanDuel Rules & Scoring]. 36 Draftking Fantasy Rules, supra note 31. 37 Edelman, supra note 28, at 29. 38 For season-long fantasy leagues, participants are allowed to trade players to supplement their team and to change its scoring tendencies. Typically, those players better able to make beneficial trades will be more successful throughout the season league. 39 There is not enough roster space among the participants to accommodate every player in the NFL. Therefore, participants can choose to add a free agent from among the players not on a roster and add them to their own. This is typically done by releasing a player already on the roster to make room for the incoming free agent.

278 Betting on Skills for Fantasy Sports place for the league in which they are competing. FanDuel40 and DraftKings41 have different scoring systems than each other and other, more commonly used fantasy sites, such as ESPN.42 Knowledge of each scoring system and how it affects the player-choosing process is integral in compiling a winning team. If a participant were to take the skills they learned in a standard ESPN scoring league and use them at either FanDuel or DraftKings without analyzing the scoring format, that participant will instantly be at a disadvantage. Aside from simply awarding different values for statistical achievements, both websites add ways for players to accumulate points which are necessary to know to maximize one’s team.43 First, unlike ESPN standard scoring, FanDuel44 and DraftKings45 both incorporate “Points Per Reception” (“PPR”) in their scoring. Typically, PPR awards every player one point (or in the case of FanDuel, 0.5 points) for each reception they have in a game.46 This can drastically change the value and ranking of a player because it adds a completely new dimension to consider in whether to include a player in one’s lineup. DraftKings further branches from the ESPN standard scoring and FanDuel formats by incorporating bonuses for when players reach certain statistical milestones throughout the course of the game.47 Whenever a player throws for three hundred or more yards or has one hundred or more rushing or receiving yards, DraftKings awards that player an additional three points for each accomplishment.48 Knowing which players are more likely to get that bonus, and thus the additional points, comes from knowing player trends, the injury report of the given week, weather conditions at game time, and how effective the defense is at stopping an opposing offense. These skills are something each player should do before choosing a lineup in a DraftKings contest. Analyzing

40 FanDuel Rules & Scoring, supra note 35. 41 Draftking Fantasy Rules, supra note 31. 42 Scoring Settings for Standard Leagues (Free Leagues), ESPN, http://games.espn.go.com/ffl/resources/help/content?name=scoring-settings-standard (last visited Oct. 17, 2017). 43 See supra notes 38-40. Each website offers different scoring from the other two. ESPN is the most conservative and lowest scoring of the three. In standard scoring ESPN leagues, there is no decimal scoring for each individual yard, Def/ST’s can lose points for giving up more yards, and Quarterbacks lose two points for every interception. FanDuel scoring is more similar to ESPN than DraftKings. FanDuel allows for decimal scoring, 0.5 points per reception, only deducts one point for interceptions thrown, and does not penalize Def/ST’s for giving up more yards. DraftKings meanwhile will typically award the highest point totals of the three. DraftKings does decimal scoring, gives bonuses to players that meet certain in-game performance achievements, only deducts one point for any turnover, gives one point per reception, and does not deduct Def/ST’s for giving up more yards. 44 See supra note 38. 45 See supra note 39. 46 Fantasy Football Basics, Part 3—The PPR Variation, Fantasy Football Impact, http://fantasyfootballimpact.com/fantasy-football-101/fantasy-football-basics- ppr-variation/ (last visited Oct. 17, 2017). 47 See supra note 39. 48 Id.

279 Savannah Law Review [Vol. 4:1, 2017] these factors is not a guarantee to get a certain bonus, but a way to maximize a participant’s chances to achieve them. In comparing Appendices A, B, and C, one can see how a player’s value can fluctuate based off the scoring system in place. For example, Appendix A lists Allen Robinson as a Top Five Wide Receiver. However, under the scoring format of both DraftKings and FanDuel, DeAndre Hopkins takes his spot because both of those scoring formats are PPR and Hopkins had 111 catches compared to Robinson’s 80.49 An example of the impact of bonuses can be seen in the rankings. In both ESPN standard scoring and FanDuel scoring formats, ranks higher than Blake Bortles; however, DraftKings ranks Bortles higher on account of him having more three hundred yard passing games than Wilson.50 Even though knowledge of the scoring seems like such a fundamentally simple and obvious concept, it has huge implications which affect every outcome. If a DFS participant is accustomed to Carson Palmer and Blake Bortles being almost statistically identical in ESPN51and then they choose Palmer, they will be at a mathematical disadvantage in both FanDuel and DraftKings because both score Blake Bortles as having almost a one point per week average better than Carson Palmer.52 While this does not seem like a significant advantage, if a player allocates more money to acquire Carson Palmer than they would for Blake Bortles, that participant has already been put at a disadvantage under the salary cap system. Participants that have detailed knowledge of the scoring system, hold a distinct advantage over players with no such knowledge.

Initial Player Allocation These season long fantasy leagues, as well as Daily Fantasy Sports leagues, begin with an initial way of allocating players to each participant. The most common ways to do this is either through an auction type system53 where the participants bid a set amount of play money for the rights to own a player, or through a draft system54 where each participant takes a turn picking the rights to players for their fantasy team. An element of chance exists in the draft format, in

49 Statistics, NFL, http://www.nfl.com/stats/categorystats?tabSeq=1&statistic PositionCategory=WIDE_RECEIVER&season=2015&seasonType=REG (last visited Oct. 17, 2017). 50 See Jacksonville Jaguars: Blake Bortles, NFL, http://www.nfl.com/ player/blakebortles/2543477/gamelogs (last visited Oct. 17, 2017) (showing that Blake Bortles had six 300 yard passing games); Seattle Seahawks: Russell Wilson, NFL, http://www.nfl.com/player/russellwilson/2532975/gamelogs (last visited on Oct. 17, 2017) (showing that Russell Wilson only had one 300 yard passing games). 51 See Scoring Leaders, ESPN, http://games.espn.go.com/ ffl/leaders?&slotCategoryId=0 (last visited Oct. 17, 2017) (showing that Carson Palmer scored 300 points over the course of the 2015 season, while Blake Bortles scored 302). 52 As demonstrated in Appendices B and C. 53 Auction Draft, Fantasy, http://www.nfl.com/fantasyfootball/help/auctiondraft (last visited Oct. 17, 2017). 54 How to Draft, Fantasy, http://fantasy.nfl.com/draftcenter/help (last visited Oct. 17, 2017).

280 Betting on Skills for Fantasy Sports that a participant may not have the ability to choose which draft slot they are assigned, thus affecting their ability to choose the team they would prefer to have.55 Additionally, the use of a draft eliminates the skill involved in driving up the price of players during an auction format.56 No matter which format the league decides to use, however, in terms of importance, a successful initial allocation of fantasy players is the most crucial element to a winning fantasy season because this is when the lineup is first created. After the initial allocation of players, either through an auction or a draft, each participant has a complete team with which to operate.57 The participant will set a lineup of players and will gain points based off of each player’s performance in that given week.58 In most situations, participants will go head- to-head against one other person in the league and the team scores the most points between the two will be the winner.59 This is where Daily Fantasy Sports and season long leagues begin to branch apart in similarities. While participants in DFS must choose a new lineup every week and submit another entry fee, participants in season long fantasy leagues must continue to use the same team they initially chose to initiate trades with other participants or to supplement their lineup with unclaimed players.

Equal Opportunity to Acquire Players One difference in the allocation of players between Daily Fantasy Leagues and season long leagues, is that both FanDuel60 and DraftKings61 use a modified version of the auction system, also called a salary cap format. In this modified auction system, each NFL player has an assigned monetary value and a salary cap binds each participant to budget their money wisely FanDuel allows for a $60,000 salary cap and DraftKings has a $50,000 salary cap. Thus, the goal of the player selection is finding those players whose projected value for the following week will exceed their cost towards the participant’s salary cap.62 In effect, what this allows is for any participant in a Daily Fantasy League to have a fair and equal chance of selecting a winning team because they have access to set

55 Edelman, supra note 28, at 29. 56 Id. 57 Jon Bales, FanDuel NFL Strategy—How To Win At FanDuel Football, RotoGrinders (Oct. 12, 2015), https://rotogrinders.com/articles/fanduel-nfl- strategy-239686; https://www.draftkings.com/help/nfl (last visited Oct. 17, 2017). Both DFS sites have the same lineup position requirements: one quarterback, two running backs, three wide receivers, one tight end, one defense, and one kicker. 58 Everything You Need to Know About Daily Fantasy Football, USA Today (Sept. 4, 2016), http://fantasy.usatoday.com/2014/09/daily-tutorial. 59 Id. 60 FanDuel Insider, https://www.fanduel.com/insider/2015/07/02/fantasy- football-2015-the-basics-of-fanduel-nfl-pricing/ (last visited Oct. 17, 2017). 61 See supra note 36. 62 Brandon Marianne Lee, Official FanDuel Glossary for Commonly Used DFS Terms, FanDuel (June 15, 2016, 4:52 PM), https://www.fanduel.com/insider/2015/06/15/official-fanduel-glossary-for-commonly- used-dfs-terms/ (last visited Oct. 17, 2017).

281 Savannah Law Review [Vol. 4:1, 2017] the lineup of their choosing regardless of the actions of other participants. This tends to allow participants who have more knowledge and statistical insight into the game to have a distinct advantage over participants who picked their players without such knowledge.63 The focus of DFS is to compile the best lineup of players for a given week instead of maintaining a team over a long period of time as is the case for season long leagues. This should not be considered as a diminution of the element of skill, however, because as previously stated, the initial choosing of players is the most crucial element in determining one’s success in fantasy football. Additionally, having to analyze and choose among the whole spectrum of NFL players every week is a skill not required in season long fantasy leagues. While DFS does not have the continued maintenance of a singular team for the length of an entire season, the added emphasis on choosing the right players from the available pool and getting the “salary” of these players under the prescribed cap still makes skill the predominant factor in Daily Fantasy Sports.

Diversification of Risk Another way of looking at the skill involved in DFS is to compare creating a lineup to creating a diversified portfolio. Skilled investors create a balanced portfolio with several different kinds of investments ranging from low-risk government bonds to blue chip stocks to stocks in foreign companies.64 Each of these investments carries with it a certain amount of risk as well as a certain amount of reward. For example, bonds carry with them a known rate of return with very little risk involved, while stocks in foreign companies carry with them a significant risk but also offer a much higher return if the risk ends up paying off.65 Choosing which risk to take and mitigating the impact if that risk pays does not pay off is a skill which every good investor should have. The data available in the Appendices helps provide an example to substantiate this argument further. In terms of quarterbacks, while Cam Newton is the number one rated player at his position, he is not the most reliable and risk-free. In all scoring methods provided, Carson Palmer is actually the most risk-free quarterback with his “chance to bust” being among the lowest at his position. Palmer, however, did not carry with him a high “chance to break out” making his choice among DFS participants similar to that of an investor adding a government bond to a portfolio. Meanwhile, Doug Martin is similar to that of adding high-risk, foreign stocks to a portfolio. Even though Martin scored the third-most points for his position in the 2015 season in all scoring formats, he busted more than he broke out. In fact, in DraftKings’ scoring format, Martin busted in eight games while only breaking out in four of them. Adding Martin to

63 See Jason Robins, The Analytics Behind Winning at Daily Fantasy Sports, MIT Sloan Sports Analytics Conf., http://www.sloansportsconference.com/content/the-analytics-behind-winning-at-daily- fantasy-sports/ (last visited Oct. 17, 2017). 64 See The Pros’ Guide to Diversification, Fidelity Viewpoints (Aug. 19, 2015), https://www.fidelity.com/viewpoints/guide-to-diversification. 65 Id.

282 Betting on Skills for Fantasy Sports any DFS fantasy lineup in 2015 always carried with it a significant risk, which, if it did not pay off, would cause a lineup to potentially lose. To further show how skill is involved in the player selection process, a participant’s ability to look at and understand the use of the players along with that player’s individual matchups, can further lower the risk of having a bust in a lineup. For example, the Appendices use data from the season as a whole and include games that the player missed because of injury or suspension. A participant knowing when a player is at risk of not being able to play can be an integral part of determining one’s lineup. That knowledge can come from injury reports released by every NFL team, but it can also come with doing some due diligence and being up-to-date on the injury status right until game time. Some NFL teams have notorious reputations of releasing team injury reports and making it seem like a player will likely play, but then make that player inactive right before the game begins.66 It takes knowledge of how NFL teams operate when it comes to injury reports in order to have this advantage. Another aspect of football that participants can use to help decrease the risk involved in their lineups is to know the matchups of the teams playing. The offensive players which comprise a majority of the lineups do not just play and acquire their stats in a vacuum. They play against a defense. How proficient the defense is that the player is competing against should be one of the predominant factors in deciding which player to choose in a lineup. For example, the number one defense in terms of total yards allowed in the 2015 season was the Denver Broncos.67 The Broncos held opposing offenses to an average of 283.1 yards per game (“YPG”) during the course of the season.68 Meanwhile, the worst defense in the league, the , allowed opposing offenses to march for 420.3 YPG.69 Without taking scoring defense into consideration and only focusing on yards allowed,70 the Giants allowed anywhere between fourteen and twenty-nine more fantasy points per game to opposing offenses.71 Therefore, if the choice came between a great player competing against the Broncos or a mediocre player

66 See generally Mike Florio, Grigson’s Insistence on “Integrity” Could Force NFL’s Hand on Luck’s Hidden Injury, NBC Sports (Nov. 2, 2015, 3:32 PM), http://profootballtalk.nbcsports.com/2015/11/02/grigsons-insistence-on-integrity-could- force-nfls-hand-on-luck-injury/ (discussing player injuries and lax enforcement of NFL injury reporting protocols). 67 Statistics, NFL, http://www.nfl.com/stats/categorystats?tabSeq=2&defensive StatisticCategory=GAME_STATS&conference=ALL&role=OPP&season=2015&season Type=REG&d-447263-s=TOTAL_YARDS_GAME_AVG&d-447263-o=1&d-447263- n=1 (last visited July 23, 2016). 68 Id. 69 Id. 70 Scoring Defense would also allow for and scoring to be considered. 71 These numbers are determined by first subtracting the Broncos’ defensive YPG allowed from the Giants’ defense YPG allowed. Any number higher than fourteen can only be scored in DraftKings’ scoring format in allowing for bonus points. For the 420.3 yards, there is a possibility for fifteen bonus points: Quarterback has 300 yards or more passing, three Wide Receivers have more than 100 yards receiving, and a Running Back has more than 100 yards rushing.

283 Savannah Law Review [Vol. 4:1, 2017] competing against the Giants, oftentimes the smartest play a participant can make would be to choose the player competing against the worse defense. As mentioned earlier, all of the factors mentioned above do not guarantee a winning lineup every time, but rather these factors are tools to reduce the amount of risk in determining one’s lineup. The presence of chance does not automatically make DFS illegal gambling because eliminating all chance is not a requirement under the UIGEA. More skilled participants, however, will better know how to manage these factors in setting lineups, directly affecting the outcome of the weekly contests.

IV. Public Perception of Daily Fantasy Sports Because of the recent explosion of popularity and attention being given to DFS, it is important to determine the public’s perception of the industry. Many media outlets have given opinion pieces about whether or not DFS constitutes illegal gambling. This Part will try to correct some of the problems in the way the media is portraying the legality of DFS.

Portrayal of Daily Fantasy Sports in Popular Media The national coverage of the legal controversy surrounding fantasy sports is extensive with some major media outlets portraying DFS as illegal gambling.72 The beginning of the 2015 NFL season coupled with the drastic increase in advertising for DFS73 resulted in far more media attention being given to this issue. Comedy news shows have even chimed in on the issue. For example, HBO’s Last Week Tonight with John Oliver aired a segment on November 15, 2015, trying to give a comedic twist to the legal issues at play.74 The show clearly takes the stance that Daily Fantasy Sports constitutes illegal gambling.75 One- liners such as, “[Daily Fantasy Sports is] the same as season long fantasy, the way a nice mug of tea is the same as a nice baggie of heroin,”76 and “by any rational definition, daily fantasy is gambling.”77 The segment concludes with a satirical commercial for Daily Fantasy Sports in which the closing line is, “It’s not gambling. It’s playing a game where my cash winnings depend on the performance of professional athletes. Wait, I described gambling.”78

72 See Jay Caspian Kang, How the Daily Fantasy Sports Industry Turns Fans Into Suckers, N.Y. Times Mag. (Jan. 6, 2016), http://www.nytimes.com/2016/01/06/magazine/how-the-daily-fantasy-sports-industry- turns-fans-into-suckers.html. 73 Tom Kludt, DraftKings and FanDuel Ads Seem to be Everywhere on TV Because They Are, CNN Money (Oct. 8, 2015, 5:23 PM), http://money.cnn.com/2015/10/08/media/fanduel-draftkings-commercials/. 74 Last Week Tonight with John Oliver: Daily Fantasy Sports, (HBO television broadcast Nov. 15, 2015). 75 Id. 76 Id. at 1:50–55. 77 Id. at 14:50–56. 78 Id. at 18:10–18.

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While this segment and similar portrayals are comedic and help keep viewers entertained, there are public consequences in their presentation. First, the issue falsely becomes oversimplified and perceived as a black-and-white issue. Second, foundations of the argument are founded on irrelevant facts that do not apply to the issue at large. Lastly, millions of people see these media opinions and comedic portrayals,79 possibly forming their opinions on the issue based on the material presented.

Oversimplification The issue of Daily Fantasy Sports is not a simple issue that can be accurately described in a matter of sentences. Analyzing whether DFS is gambling means looking at the application of both federal and state laws. Simply stating that common sense says it should be gambling is not enough to conclusively decide the issue. Reasonable persons, both DFS participants and those opposed to the industry, can differ on whether DFS is a game determined predominantly by skill or luck. This disagreement, however, is presented –as in the case of the John Oliver segment– as being completely a matter of semantics and that because “these sites . . . look a lot like gambling,” that must be what they are as a matter of common sense.80 Oversimplifying a complex issue (which, as previously discussed, is allowed under federal law) and presenting it to the public as a matter of common sense does nothing to foster a healthy debate.

Use of Irrelevant Facts Another way the portrayal of this issue can have public consequences is when irrelevant facts are used to support the position against DFS. John Oliver also mentions two facts as being evidence to support the proposition that DFS is illegal gambling. First, he states that FanDuel has applied for and has been granted a gambling license in the United Kingdom.81 Second, he mentions that because DFS sponsors and advertises at poker tournaments, they should be seen as gambling because that is the image being projected.82 Neither of these facts have any consequential bearing on the legality of DFS under United States law and should be viewed only as business decisions. Just because DFS sites have to apply for gambling licenses in the United Kingdom should not automatically create the presumption that they are illegal in the United States. The United Kingdom does not currently have a fantasy carve out exception in its gambling laws, and actually has a much stricter definition of gambling.83 Under UK laws, a game which combines both skill and chance in any way and awards a prize to the winner constitutes gambling.84 FanDuel and

79 See Last Week Tonight with John Oliver: Daily Fantasy Sports, supra note 74 (this segment has over four million views as of July 23, 2016). 80 Id. at 4:03–08. 81 Id. at 6:20–25. 82 See id. at 14:35-55. 83 See Gambling Act 2005, c. 19, §§ 3, 6, 9, 14-15 (Eng.), http://www.legislation.gov.uk/ukpga/2005/19/contents. 84 Id. § 6.

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DraftKings applied for licenses85 because DFS sites would likely have a difficult time arguing that DFS does not involve any chance. Going into a new and emerging market without knowing some kind of guarantee that they would be able to operate does not make good business sense for DFS sites. Not getting into a new market where is becoming increasingly popular is also not a wise business decision. Therefore, the decision to get the UK licenses should not be seen as an admission of running an illegal gambling service in the United States, but rather as a necessary business decision made in order to attract a new market of customers while protecting the company from potential future problems. Advertising for and sponsoring poker tournaments also should not create an automatic assumption of illegal gambling. The fact of the matter is that DFS and poker share a common market demographic. Middle-aged men with college degrees making more than $50,000 per year make up a large share of both the fantasy86 and poker87 demographics. By making their brand more widely known in this demographic, DFS sites are doing what every business does: attempting to attract potential customers. Simply because poker is seen as a form of gambling does not mean that everything associated with it should be as well. Jack Link’s Beef Jerky, Red Bull, and Amp Energy Drink all are sponsors at the World Series of Poker because they all have a common goal: to capitalize on unique advertising opportunities in order to sell their products while reaching out to a growing group of possible consumers.88

Viewership of These Opinions As of March 12, 2016, John Oliver’s segment has over four million views on YouTube.89 Widespread dissemination of that information potentially has the impact to unfairly sway public opinion without presenting all of the facts needed. Furthermore, this level of viewership further exacerbates the problems of oversimplification and presenting irrelevant facts by spreading these problems to a larger audience.

V. Conclusion While the determination on the legality of DFS will likely be resolved on the state level, having a federal law like the UIGEA offering protection helps the arguments in favor of DFS. States have different definitions of what constitutes

85 Jacob Pramuk, UK launch gives DraftKings a 'Gambling' Problem, CNBC Ent. (Feb. 8, 2016, 1:56 PM), http://www.cnbc.com/2016/02/08/uk-launch-gives-draftkings- a-gambling-problem.html. 86 Industry Demographics: Actionable Insights & Insightful Data, Fantasy Sports Trade Ass’n http://fsta.org/research/industry-demographics/ (last visited Oct. 17, 2017). 87 Demographics, Mediarex Sports & Ent., http://www.mediarex.com/advertising/poker-demographics/ (last visited Oct. 17, 2017). 88 See How to Become a WSOP Sponsor, WSOP, http://www.wsop.com/2011/sponsors/ (last visited on Oct. 17, 2017). 89 Last Week Tonight with John Oliver: Daily Fantasy Sports, supra note 74.

286 Betting on Skills for Fantasy Sports gambling, and each state must decide what is best for its citizens. As this debate continues, and likely spilling over to the 2016 NFL season, DFS participants will have to keep up with the news in order to know if playing DFS is legal in their states. As long as there is uncertainty in the law, however, participants should just look at DFS games as betting your skill.90

90 Credit must be given to Amber Lopez-Hunter for suggesting this wonderful ending sentence.

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Appendix A The following graph shows the top 5 players for the Quarterback, Running Back, and Wide Receiver position in terms of scoring under the ESPN Fantasy Football Standard Scoring format. The “Average” column shows the scoring average of the player over the course of the sixteen game season. The “High” column shows the player’s highest score achieved during the season. The “Low” column shows the player’s lowest score achieved during the season. The “Chance to Bust” column shows the probability that the player will score less than 75% of their season average in a given week. The “Chance to Break Out” column shows the probability that the player will score more than 125% of their season average in a given week.

Chance to Chance to Break QB Average High Low Bust Out Cam Newton 23.3 41 12 37.50% 37.50% Tom Brady 20.9 30 5 12.50% 31.25% Russell Wilson 20.1 34 11 37.50% 31.25% Blake Bortles 18.9 32 3 25.00% 25.00% Carson Palmer 18.8 28 7 12.50% 18.75%

RB

Devonta Freeman 14.4 37 0 37.50% 25.00% Adrian Peterson 13.6 29 1 43.75% 31.25% Doug Martin 11.7 3 2 50.00% 25.00% DeAngelo Williams 11.2 36 0 43.75% 37.50% Todd Gurley 11 27 0 37.50% 50.00%

WR

Antonio Brown 15.2 30 2 50.00% 43.75% Julio Jones 14.4 28 3 31.25% 25.00% Brandon Marshall 13.9 25 6 37.50% 31.25% Allen Robinson 13.6 33 2 31.25% 25.00% Odell Beckham, Jr. 13.5 31 0 37.50% 37.50%

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Appendix B The following graph shows the top 5 players for the Quarterback, Running Back, and Wide Receiver position in terms of scoring under the FanDuel Standard Scoring format. All values are rounded to the nearest tenth. The “Average” column shows the scoring average of the player over the course of the sixteen game season. The “High” column shows the player’s highest score achieved during the season. The “Low” column shows the player’s lowest score achieved during the season. The “Chance to Bust” column shows the probability that the player will score less than 75% of their season average in a given week. The “Chance to Break Out” column shows the probability that the player will score more than 125% of their season average in a given week.

Chance Chance to Break QB Average High Low to Bust Out Cam Newton 24.9 41.6 13.5 31.25% 25.00% Tom Brady 22 34.3 5.3 18.75% 31.25% Russell Wilson 21.5 35.2 13.4 25.00% 18.75% Blake Bortles 20.9 32.9 5.6 25.00% 18.75% Carson Palmer 20 30.6 8.2 6.25% 18.75%

RB

Devonta Freeman 17.5 39.8 0 25.00% 25.00% Adrian Peterson 15.4 31.7 4.4 31.25% 25.00% Doug Martin 13.5 35.3 4.6 37.50% 25.00% DeAngelo Williams 13.2 37.5 -0.1 43.75% 31.25% Lamar Miller 13 37.1 2.8 50.00% 31.25%

WR

Antonio Brown 20 38.9 6 31.25% 31.25% Julio Jones 19.2 34.4 5.8 31.25% 25.00% Brandon Marshall 17.8 29.6 8.7 31.25% 25.00% DeAndre Hopkins 17.2 31.8 6.1 31.25% 25.00% Odell Beckham, Jr. 17 35 0 31.25% 37.50%

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Appendix C The following graph shows the top 5 players for the Quarterback, Running Back, and Wide Receiver position in terms of scoring under the DraftKings Standard Scoring format. All values are rounded to the nearest tenth. The “Average” column shows the scoring average of the player over the course of the sixteen game season. The “High” column shows the player’s highest score achieved during the season. The “Low” column shows the player’s lowest score achieved during the season. The “Chance to Bust” column shows the probability that the player will score less than 75% of their season average in a given week. The “Chance to Break Out” column shows the probability that the player will score more than 125% of their season average in a given week.

Chance Chance to Break QB Average High Low to Bust Out Cam Newton 25.9 48.6 13.5 31.25% 31.25% Tom Brady 23.2 37.8 5.3 12.50% 25.00% Blake Bortles 22.3 35.8 6.6 25.00% 25.00% Russell Wilson 21.9 38.2 13.4 31.25% 18.75% Carson Palmer 21.6 33.6 8.2 12.50% 18.75%

RB

Devonta Freeman 20.7 45.3 0 25.00% 25.00% Adrian Peterson 17.6 35.7 6.3 31.25% 31.25% Doug Martin 15.4 39.8 4.6 50.00% 25.00% DeAngelo Williams 15.3 41.5 -0.1 43.75% 37.50% Danny Woodhead 15.3 36 2.6 37.50% 25.00%

WR

Antonio Brown 25.9 49.9 5.4 43.75% 37.50% Julio Jones 25.2 43.4 7.8 37.50% 31.25% Brandon Marshall 23.2 37.1 10.7 31.25% 25.00% DeAndre Hopkins 21.8 39.8 8.2 31.25% 31.25% Odell Beckham, Jr. 21.5 42 0 31.25% 31.25%

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