Pending Fantasy Sports Merger Begs Question

fanduel-draftkings-fantasyNow that the two largest online daily fantasy sports sites are back in the news—nearing a deal to merge into a company drawing $100 million in revenue, according to the Wall Street Journal—it’s a good time to answer a nasty, nagging question: Are these sites legal?

Because the companies in question, FanDuel and DraftKings, are backed, respectively, by fat investments from Comcast and 21st Century Fox, it’s apparent that some high-powered attorneys must think that they are. And in fact, at this point, they’re clearly legal in at least nine states. So the real question is whether they will become legal in enough states and countries—Canada now permits it, and England recently approved it as well—to make for a healthy ROI.

To get the lay of the weird landscape these companies occupy, I spoke with Josh Schiller, a partner with Boies Schiller & Flexner, which represents DraftKings, and I. Nelson Rose, a law professor at Whittier Law School in Costa Mesa, Calif., who specializes in, and writes a blog on, gambling law.

Generally, whether gambling is illegal or not is a state law matter. The definition of what constitutes gambling varies, though in most states playing games of chance for money—like craps and roulette—is pretty clearly considered “gambling” while playing games of skill—like chess or golf—is pretty clearly not.

More at Fortune

Related Stories from This Week in Gambling:

  • Fantasy Sports Pay $12 Million for “Deceptive Ads” in New York The country’s two leading online daily fantasy sports companies are paying out big — in fines to the state. FanDuel and DraftKings on Tuesday agreed to pay $6 million each to settle lawsuits from Attorney General Eric Schneiderman alleging they engaged in false and deceptive advertising […]
  • FanDuel’s World Fantasy Baseball Championship Hosted by Bo Jackson Bo Jackson will host FanDuel’s World Fantasy Baseball Championship at the Cosmopolitan on Aug. 21 and 22. The former baseball and football star also will host FanDuel’s first ever Home Run Derby on Aug. 21 at Big League Dreams, where he’ll take batting practice and give advice to the 90 […]
  • DraftKings FanDuel Merger in Doubt In mid-November 2016 the two largest daily fantasy football companies, DraftKings & FanDuel, announced a merger of equals. The thinking was that instead of pouring hundreds of millions of dollars into continuing to fight each other, they could fight legal and political battles […]