The Legality of Daily Fantasy Sports

What are Daily Fantasy Sports?

Daily fantasy sports (DFS) games are a type of online competition where participants draft a virtual team of real-life athletes and score points based on those athletes’ actual statistical performance in real games. DFS players build a roster of athletes while staying under a salary cap and compete against a field of other players to win money. Often played for cash prizes, DFS games take place over shorter periods than traditional fantasy games, which usually span an entire season.

The Legality of Daily Fantasy Sports 1

Regulations on Fantasy Sports

In the United States, DFS was an unregulated industry until it rapidly grew in popularity, with the rise of companies such as DraftKings and FanDuel. To address this new form of sports betting, regulators in many states investigated the legality and constitutionality of DFS.

In 2015, New York authorities banned DFS sites, arguing they were created for gambling purposes. In the same year, authorities in Massachusetts said DFS sites could offer legal games, but would need to be licensed and regulated like casinos. Following this, in March 2016, Virginia became the first state to legalize DFS industry by regulating it like the traditional fantasy sports industry. As of October 2021, DFS is also legal and regulated in 26 other states: Alabama, Arkansas, Colorado, Delaware, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, and Vermont.

DFS Industry Today

In 2019, the DFS industry saw an estimated $8 billion in handle and $400 million in revenue. The introduction of sports betting after the Supreme Court overturned a federal ban in 2018 meant some customers who previously played DFS switched to sportsbooks, but many remained loyal to DFS for its unique gameplay. DFS now features partnerships with major sports leagues, including the NBA, NFL, NHL, and MLB, highlighting its legitimacy. Additionally, DFS games remain popular worldwide, with daily fantasy soccer and cricket leagues attracting millions of players outside the United States.

Challenges DFS Faces

Despite its legality in many states, DFS faces some challenges. Critics argue that although the industry may not technically be gambling, it still bears features of gambling, with players risking money to win a payout. The industry also faces extensive regulatory and legislative scrutiny, which can lead to tighter rules and regulation that could impact DFS companies’ profits.

Another issue is user acquisition costs. DFS operators have to spend a lot of money on marketing and advertising their services, making it difficult for smaller companies to compete with established players. Additionally, many new entrants have entered the market in recent years, creating a crowded field with intense competition.

DFS players may also face challenges covering the costs of entering contests. In 2019, 1% of players spent more than 10% of their income playing DFS games, according to an Oxford study. The same study also found that high-volume players with more than $1,000 in lifetime losses accounted for almost all player losses. Critics say that while most DFS players may indeed be playing just for fun, there are risks of addiction and financial ruin for those who become hooked. Supplement your reading by checking out the suggested external source. There, you’ll find additional and valuable information to broaden your understanding of the subject. Get informed with this research material, check it out!


The legality of DFS is a complicated topic, with enforcement and legislation differing across states. Despite challenges, the DFS industry continues to grow in popularity and gain legitimacy as partnerships with major sports leagues demonstrate the industry’s potential. While some players will face financial challenges and risks, millions of people continue to enjoy the unique gameplay and excitement of DFS games.

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