Are you breaking the law by betting on daily fantasy sports?
Updated: April 2024

Except for the State of Nevada, betting is mostly illegal across the United States with very few exceptions. This also includes betting on sports. However recent efforts to allow betting on sports into New Jersey were shoot down by courts.
In looking at the spectrum it is worthwhile mentioning that people across the country do gamble on sports events on almost a daily basis, but that doesn’t mean it’s legal. This vacuum means that there is a whole industry operating unchecked and unregulated, according to a latest estimate from the American Gambling Association a whopping $93 Billion worth of illegal bets will be placed on college and pro football matches this season. When this is compared to the odd $2 Billion in Nevada is seems like peanuts as compared.

Furthermore another kind of sports gambling and betting is noted as well, fans gather up nearly in every state in order to place bets on fantasy sports. That’s right, people bet on sites such as FanDuel and DraftKings nearly every day and what’s more this activity is deemed to be perfectly legal by the authorities. The value of these bets was recently estimated to be between $1.3 and $1.2 Billion respectively by the Wall Street Journal.

Similar to casinos in many ways these website pump up the volume by offering and promising massive financial rewards to their players – for instance DraftKings said that it would pay out more than a billion dollars in winning this year, on the other hand FanDuel expects to give away $2 Billion dollars in winnings and prizes to its fans.

These websites offer a niche in the world of sports, the idea is the same but the variations are countless. Each player will choose its athletes and draw them into their own virtual teams. The team which does the best will win the cash. For decades now nerds have been operating in the same way, they’ve put together teams and matched them against each other. But with the advent of daily fantasy sports the number of bets and games has risen phenomenally and thus so has the number of winners.

On the other side of the fence so has the number of losers as well. Entering these contests is free, and most will require a startup wager which can range from 25 cents to hundreds and even thousands of dollars on each bet. And of course the higher the bet, the bigger is the payout. Some would say fantasy indeed, but it is very much a reality.

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So why is betting on fantasy sports legal and betting on regular sports is not?
Fortune magazine has put forward a theory which explains that, after much lobbying on the behalf of big boys in sports like the NFL and NBA, Congress passed the Professional and Amateur Sports Protection Act of 1992 (PASPA), this act made sports betting illegal in all but a handful of states (including Nevada and Delaware) that allowed sports betting at the time. Fantasy sports aren’t covered in the law—which was created when traditional fantasy sports leagues were still a niche interest, and long before anyone would even conceive of daily fantasy sports contests. You can read more about his topic in the daily fantasy sports guide.

What’s more, fantasy sports companies have successfully highlighted the idea and notion that in a sense the players aren’t gambling or placing bets on completely random events, such as the flip of a card or the spin of a roulette wheel. Instead, they give fantasy sports the image of a healthy competition between contestants who theoretically challenge each other using their skill, knowledge, and close attention to detail. “We are a US-based skill games company, and all of our contests are operated 100% legally under United States and Canadian law,” the DraftKings site explains. “The US Government and 45 of the 50 states consider fantasy sports a game of skill.” Then again, the same description can essentially be also applies to day trading—which may be foolish but is not illegal.