A Farmer Of Louisiana, Not An Insider Trading Scandal

1036 Words Nov 19th, 2015 5 Pages
A farmer in Louisiana, not an insider trading scandal, will destroy the multibillion dollar daily fantasy sports (DFS) industry. DFS is a rapidly growing segment of the online sports gaming industry where popular sites have grown by approximately 300% over the last year and are currently valued at over $1 billion (Miller & Singer, 2015). Leung (2015) describes the basic DFS tournament as a weekly tournament where professional athletes are allocated a value based on past performance. She says that participants are allocated a ‘salary cap’ and create a roster based on the sum of those athletes’ values, until they reach their cap. Leung also shows how a participant’s score is determined by the performance of their selected athletes that …show more content…
This statistic shows that there has to be some talent involved in DFS for a few individual to collect the majority of the profits. If DFS was entirely based off of chance the profits would be distributed in a random manner. Since the UIGEA explicitly permitting fantasy sports that are (1) for a value not dependent by the amount of participants or fees, (2) not dependent on the outcome of any real-world games, and (3) determined by the skill of the participants DFS are legal federally (Huffman, 2014). Additionally, the determination of the skill component is entirely left up to the individual states to decide what constitutes a game of chance and what constitutes a game of skill (Huffman, 2014). Most states use the predominant purpose test to determine whether to classify a game as a game of chance or a game of skill, where whichever aspect is more dominant determines the classification (Huffman, 2014). DFS sites also perform their legal obligation to restrict access to their services in states that outlaw fantasy sports by disclaiming that all participants in outlawed states are forbidden to participate in tournaments. Additionally, sites worked to meet their legal obligation by creating controls that restrict applicable access to their site for visitors from states where DFS are illegal (Drape, 2015). Since the majority of states still classify DFS as a game of skill and sites meet the

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