Turning Fantasy into Regulatory Reality: A Comparative Approach to Daily Fantasy Sports Through Contracts

FanDuel and DraftKings have become the two biggest contenders in the fast-growing daily fantasy sports industry. Heavy hitters in the sports world, like Fox Sports and NBC, have also jumped onto the daily fantasy sports bandwagon. But in New York, these websites have been made illegal. Other states are considering classifying daily fantasy sports as illegal gambling. The question of what now to do with daily fantasy sports has just been opened up, but the answer is not simple. It is undesirable to suddenly declare a multibillion-dollar industry illegal without qualification, but there are currently no regulations limiting fantasy sports providers. Analogous regulatory systems found in securities exchange regulations may be the key. Securities trading and “traditional” sports gambling have long been analogized and compared, and it is possible to fit fantasy football into this comparison between sports betting and securities exchanges. This note argues that a broader look at the structure of the provider itself – how the provider receives and disseminates information, how the provider deals between participants, what connections the provider has to the relevant industry – may provide a more useful framework to configure a solution to the biggest problems currently effecting fantasy sports.