Fantasy Sports: Towing The Line On Gambling

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Fantasy sports. The fastest growing pastime in North America. This digital game that subjects players to assembling virtual teams of real players of a professional sport to compete based on statistical performance has taken the sports world by storm. There are only two things that have had more proliferation into the global culture than fantasy sports in the 21st century: social media and smart phones.

As a whole, fantasy sports is a multibillion-dollar industry with multimillion-dollar deals with media giants such as Time Warner, FOX and ESPN. What once began as a year-long league among casual players paved the way for the extremely popular but also contentious subject of “Daily Fantasy Sports” or “DFS” for short. The biggest DFS websites, Draft Kings and Fan Duel offer players the chance to select players based on their daily matchups and go head-to-head with over thousands or even millions of players for a chance at winning prizes up to millions of dollars.
Fantasy sports has become so widespread that both Draft Kings and Fan Duel ran ads on an average of every 90 seconds on national TV networks. The Fantasy Sports Trade Association estimates that in 2015, close to 57 million people (up from 41.5 million in 2014) play fantasy sports game in North America. They’ve become so out of control that certain American states such as Arizona, New York and most recently, Texas have started cracking down on these games. This is also coming on the heels of an FBI investigation on both websites to see if there is indeed gambling activity going on. And the status of daily fantasy sports has recently been contested as a form of gambling resulting in the lockdown from the aforementioned states.
In Canada, recent developments have leaned towards fantasy sports being illegal. According to the Canadian Gaming Association, a trade group whose stakeholders include casinos, has claimed to have obtained legal opinion that daily fantasy sports games are considered to be gambling and therefor illegal under the Criminal Code of Canada.
 
The legality of fantasy sports in Canada is determined whether they are considered gaming or gambling as based on Part VII of the Canadian Criminal Code (the Code). The Code doesn’t define “gaming” but defines “game” as a “game of chance or a game of mixed chance and skill.” A strong argument can be made that fantasy sports is a game of mixed chance and skill as selecting the players does require unique sets of knowledge and intuition dependent on each player.

“Chance” is defined in Canada, according to the Supreme Court in R v Ross et al, not as “unpredictable that may occasionally defeat skill” but rather “a systematic resort to chance involved in many games such as the throw of dice, the deal of cards.”
An often cited common law definition of “bet” is:
… the backing of a forecast by offering to forfeit, in the case of an adverse issue, a sum of money or article of value to one who maintains the opposite opinion and who backs his opinion by a corresponding stipulation; it is the staking of money or other value on the event of a doubtful issue… The payment of money for the right to participate in an event is not a “bet”, even where the entry monies form a prize pool to be paid out to winning players.

If fantasy sports falls under the definitions of bet then it becomes illegal in Canada but if it falls more in lieu as a “game” then it is not prohibited from operating in Canada.

CGA commissioner Don Bourgeois, a former general counsel for the Alcohol and Gaming Commission of Ontario however asserts that fantasy gaming is not a game of skill despite what the companies say because they are “game of mixed skill and chance” and by the Criminal Code that is considered “gambling”.
If fantasy sports is outlawed in Canada it will at the least put millions of dollars in investment at risk especially with the NHL, which has joined with other sports leagues in the MLB and MLS to fund up to $300 million to Draft Kings in the summer of 2015.
It is worth keeping an eye on the status of daily fantasy sports in Canada (and North America as a whole) due to the stakes and whether it is seen as a pointless silly pastime, an alternative to gambling or just a fun way to play with money, it will continuously be an integral part of sporting culture in North America.

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