Alabama and Tennessee have declared paid daily fantasy sports (DFS) contests to be illegal joining a list of states that have recently come down hard on the DFS industry.
Alabama Attorney General Luther Strange has ruled that DFS games are illegal as per current laws of the state and has sent cease and desist letters to top DFS sites such as FanDuel and DraftKings asking them to stop operations in the state.
Following the ruling, the sites must stop accepting paid entries from May 1 onwards.
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According to the laws of the state, an activity is considered illegal when a person stakes something of value in a contest involving chance in order to win a prize, even if elements of skill are involved in the activity.
Strange accepted that DFS involved skill on part of the contestants, but he said that ultimately the contestants had no control over the results. He added that with injuries often ruling out players, results depended significantly on chance. Strange said that 11 other states across United States have also declared DFS to be illegal and the same applied in Alabama.
Alabama is considering new legislation to legalize DFS with a bill called The Fantasy Contests Act, which seeks to regulate the industry. It is to be presented before Alabama’s legislative chambers in the coming weeks.
Tennessee Attorney General Herbert Slattery also voiced an opinion similar to Strange’s. He has stated that all fantasy sports including the traditional season-long versions are gambling and so illegal under the state’s law.
In a statement Slattery said
While participants may use skill to select players for their teams, winning a fantasy sports contest is contingent to some degree on chance. Namely, the participants do not control how selected athletes perform in actuality on a given day. Athletes’ performances are affected by many fortuitous factors – weather, facilities, referees, injuries, etc
The attorney general said that unless legislation specifically excludes DFS from being labelled as gambling, all paid contests are illegal under Tennessee law.
Slattery’s opinion is not binding as his opinion was sought by the legislative assembly during the course of developing licensing and regulation legislation for the DFS industry. The bill has been already approved in the state Senate.
Almost 30 U.S states are in the process of developing legislation to legalize DFS. In Missouri the bill is awaiting a second vote in the state’s House after receiving an initial approval, before it moves to the state’s Senate. In Illinois the bill is still being developed as lawmakers work on its provisions.
Maryland will need to put the bills for approval to the voters in a referendum, which is yet to be finalized. Colorado is also still yet to make definitive progress although the bill has been presented to the House.
