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The issue in DraftKings is that DraftKings and FanDuel and Yahoo and a number of other companies provide fantasy sports contests in which people pay an entry fee and they compete for various prizes. That’s been going on, in some senses, for decades and they particularly concentrate on what are called daily fantasy sports as opposed to season-long fantasy sports.
Season-long fantasy sports have been going on for probably 25, 35, 40 years. Daily fantasy sports are more recent, but they’ve been going on for 8 or 9 years. And no one’s ever had any doubt about the fact that these were legal. Starting a little bit less than a year ago, there began to be some contentions from the attorney general in New York that, contrary to what everybody had believed, this might be illegal gambling because you’re paying an entry fee and you’re getting a prize.
Now, it’s pretty clear that this is a game of skill not a game of chance, and, under New York law, in order to be gambling, there has to be a material degree of chance in the contest, like throwing dice, playing cards where you’re dealing the cards, or roulette. Those are all typical games in which there’s a substantial amount of chance. Like, Poker, there’s some skill obviously, but it’s also a material degree of chance that courts have held because you have to deal out the cards, and the deal out of the cards is random.
On the other hand, chess, for example, is generally viewed as clearly a game of skill even though there’s an advantage to who goes forth, and that’s determined simply by chance. So, there is some element of chance in every game, including chess. And who gets to go first, it’s about an 8 percent advantage maybe. So, every game is a combination of some skill and some chance, but the question is which predominates.
And I think everybody recognized that skill predominated in fantasy sports, but the question has now been raised as to whether that’s really true or not and we’re both litigating that and we’re also going to legislatures to try and get the legislature just to clarify the law so that we don’t have to go through years and years of uncertainty in litigation.
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New York Litigation attorney, David Boies, discusses the DraftKings case.