Will Alabama Do Something About Fantasy Sports?

American football playersFantasy sports are one of the most popular hobbies in the entire nation. According to research from American Express, there are about 75 million people in the U.S. playing fantasy sports this year and spending a staggering sum of $4.6 billion doing so.

Recently, fantasy sports have come under fire, because after a closer look, they appear to be closer to gambling games than the skill based games they’re supposed to be, which could be problematic for Alabama.

According to Yellowhammer, about 1.14 million Alabama-residents play fantasy sports, if the percentage of Americans is applied to Alabama’s population, though the number is likely higher. After all, the University of Alabama’s total athletic department revenue between 2011 and 2012 was a staggering $124.1 million.

The idea is relatively simple. In season-long fantasy leagues, a group of people (who are often friends or co-workers or family), play for free on websites like Yahoo!, bidding on real-life players to assemble a roster, and then win or lose based on their players’ performances. Nowadays, there are daily and weekly fantasy games, which require entry fees ranging from as little as 25 cents to $1,000, and can sometimes have massive jackpots — up to $2 million.

In 2006, President Bush signed a federal law banning Internet gambling. However, there was a small loophole allowing games of skill to continue being played online, and it is this loophole that forms the legal grounds on which many fantasy sites stand.

Yet, both Nevada and New York’s Attorney General are labeling fantasy sports as gambling. DraftKings, one of the most popular fantasy sports sites, has even applied for and received a gambling license in the United Kingdom. That’s not to mention that one of the legislators who helped build the 2006 law thinks fantasy sports are gambling.

“The only unique legal basis provided fantasy sports by [the Unlawful Internet Gambling Enforcement Act (UIGEA)] is its exemption from one law enforcement mechanism where the burden for compliance has been placed on private sector financial firms,” Leach said. “But it is sheer chutzpah for a fantasy sports company to cite the law as a legal basis for existing. Quite precisely, UIGEA does not exempt fantasy sports companies from any other obligation to any other law.”

When determining whether or not something can be considered gambling, many lawmakers look to see if the game in question is more a game of chance or of skill. If a player needs luck to win the game, then it’s a game of chance. Picking the best players of the day or week, fantasy sites argue, is a skill.

However, the Internet is a large, powerful entity. Take Google, for example. The monolithic tech company has indexed about 200 Terabytes’ — 204,800 gigs’ — worth of data and it’s only just scratched the web’s surface, indexing about 0.004% of the total Internet. Considering the web’s sheer vastness, it should come as no surprise that many “skilled” fantasy players use statistics and data available online to fuel algorithms that help them pick the best players.

In fact, one study found that 1.3% of a baseball fantasy sports league’s players won 91% of the profits. Worse, 85% were losers.

In other words, fantasy sports appear to be games that are essentially rigged.

When Yellowhammer reached out to Alabama’s Attorney General to ask if he would consider taking any action to shut down fantasy sports, an office spokesperson said, “As a general rule, the Attorney General’s Office refrains from commenting on whether we are investigating or not investigating a case unless we are ready to do so.”