Petta is an elite daily fantasy sports player, a shark, as research and consulting firm McKinsey & Company calls them in a recent report. But UIGEA (pronounced “you-GEE-uh”) exempted fantasy leagues like Levine’s – season-long fantasy leagues.
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The response revolved around the distinction in heavily increased entry fees with daily fantasy.
“Fine, you have that skill” to pick a roster of players based on their abilities and track records, Mendez conceded, reiterating the two gaming sites’ arguments as he engaged a lawyer for FanDuel. The attorney general’s office largely read from a script at Wednesday’s hearing, which drew criticism from legal experts on Twitter, who noted the move was unusual.
Daily fantasy sports are not regulated in California, but Assemblymember Adam Gray, D-Merced, introduced a bill, AB 1437, to do just that.
“We can only do so by bringing this industry out of the shadows”.
McGee said in arguing the state’s case that the only skill demonstrated by daily-fantasy players is “skill at gambling”.
David Boies, a high-powered attorney representing DraftKings, told Mendez the key question is whether the “players of fantasy sports are able to influence the outcome of the contest”. “Let’s see what we have before we go out and legalize something”. But because daily fantasy did not exist at the time, those businesses were legally permitted. She added that based on the California Supreme Court’s ruling in a 1999 case on tribal gaming, the statute that defines daily fantasy sports as illegal gambling could only be overturned by a constitutional amendment. “So to me it has to be a game of skill, and I don’t really think there’s an argument that can be made against that”. Sometimes a Form 1099-K includes net profit that is also reported on a Form 1099-MISC from a fantasy-sports site. Even though games of chance may require “some amount of skill”, he says, they’re still illegal because they’re gambling. In his mind, that makes them clearly a game of chance.
Brett Abarbanel, a scholar in the UCLA Gambling studies department, described the nuance that the industry has used to justify continued use of the UIGEA exemption. While the funds from lotteries and casinos may sometimes contribute to better schools and more jobs, gambling itself can be a destructive force for individuals and communities alike. Players are betting on the outcomes of games they can’t control, she said, making it an illegal game of chance.
“In poker, you play the hand that you are dealt”, Boies said.
The daily fantasy sports clearly targets and is appealing to people who want to get rich quick, real quick.
He argues that the exact strategies that happen in, say, a football game, like a winning quarterback taking a knee during the last minutes of a game, could not be anticipated by someone playing a daily fantasy game no matter how skilled that person is.
The first question is whether it will be done, as in finished. “It is not a simple thing to rule against the AG, especially in a case where the “right” answer is not immediately apparent”, Ifrah said. Schneiderman said it came down to the entry fees daily fantasy services collect for the contests, according to Sports Business Journal.
DraftKings CEO Jason Robins, center, leaves court after a November 25 hearing in NY.
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The case is hugely important to daily fantasy sports companies. “It’s like apples and oranges”. Fong admits that skill also plays a factor in daily fantasy sports; just like Petta, and Eaton admit that chance is also at play.
