When I first started consulting for fantasy sports businesses more than a decade ago, Montana was the only state in the country to administratively regulate fantasy sports. For the most part, the practice of fantasy sports law entailed interpreting how state common laws would interpret the legality of particular fantasy sports games. This involved seeking to ensure that clients' fantasy sports contests involved the requisite level of skill to chance to comply with state common law.
Today, however, the practice of fantasy sports law has changed dramatically. With upwards for 18 states now passing statutes to legalize and administratively regulate fantasy sports, the job of the fantasy sports lawyer has become less about projecting ratios of skill to chance (albeit, that still matters in certain states) and more about working with state gaming agencies to complete paperwork and ensure compliance with a bureaucratic set of rules. In this vein, the practice of fantasy sports law is becoming more akin to environmental law or food law -- legal practices that are highly administrative in nature.
Indeed, in the new world, the new challenges often involve convincing administrators with gaming agencies to grant permits to contests, even when the administrators at the gaming agencies are sometimes left to contend with rules that were not well written by state legislatures. In some states, practicing fantasy sports law nowadays means trying to help traditional fantasy sports operators navigate rules that require the segregation of player funds, even though these rules were drafted by legislators with daily fantasy contests in mind and not based on the full season events where money is collected and paid out over a far shorter time interval.
In other states, the challenge today is overcoming bizarre idiosyncrasies in the law. For example, the New York law that went into effect in August 2016 requires all fantasy sports companies that did not operate in the state prior to that time to obtain a full license, rather than a temporary permit. Nevertheless, nearly two years after the law's passing, the New York State Gaming Commission still has not put forward an application for one to apply for a full license.
In the coming years, one can only expect the practice of fantasy sports law to become more administrative, as more states pass laws to legalize and regulate fantasy sports. Also, many states may tie together their fantasy sports regulations with regulations to regulate traditional sports gambling -- an activity that all states may now choose to legalize and regulate due to the Supreme Court's recent voiding of the Professional and Amateur Sports Protection Act.
It is indeed interesting times for the practice of fantasy sports law. Yet, even in this changing legal environment, the same standard axiom applies as strongly today as more than 10 years ago: companies that wish to thrive in the fantasy sports marketplace need to be legally compliant. And this first means knowing and understanding the underlying laws of their industry.
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Marc Edelman (Marc@MarcEdelman.com) is a Professor of Law at Baruch College’s Zicklin School of Business and the founder of Edelman Law. He is the author of three of the leading articles in the field of fantasy sports law: "A Short Treatise on Fantasy Sports and the Law," "Navigating the Legal Risks of Fantasy Sports," and "Regulating Fantasy Sports."
