Should Pay-to-Play Fantasy Football Be Illegal?

by Jessica Sommerfield · 6 comments

As summer winds down, we enter the fall season of cooler temperatures, apple cider, and Sunday afternoons watching the All-American Pastime. Many football fans prepare to set up their rosters, complete their drafts, and participate in a sport of their own.

Fantasy football, a game of statistics in which participants bet on a virtual team of drafted NFL football players, has rapidly gained popularity in the last few years.

Recent polls reveal that more than 50% of Americans watch NFL football, and nearly 75% of American men. Leagues have become a way for fans to extend their enjoyment of the spectator sport into a competition of NFL player knowledge and predictability.

As with many addictive pastimes, what started as non-lucrative competitions between friends has turned into a billion-dollar industry. Most of this revenue is in the form of league “pay-to-play” fees, which go toward prize money to winning players and teams, as well as membership fees for major fantasy football league website services. Many fantasy league site owners such as Yahoo, NFL, ESPN, and CBS offer automatic point updates after games and allow players to more effortlessly manage their virtual teams.

In spite of its popularity, its legal footing in many states remains shaky. Here’s why:

How much is spent on fantasy football?

Polls suggest that the average league participant spends about $400 a year in league dues and website fees, although many die-hard fantasy football players spend much more. Online fantasy football sites have discovered the Achilles heal of its gamers by offering better services and higher-stakes prizes for more money up front.

Spending money on fantasy football, like any other hobby, isn’t a problem unless it threatens your budget. The trickier question is whether or not it’s legal in some states.

Why would fantasy football be illegal?

Although federal law protects fantasy football that involves winnings, with the stipulation that earnings over a certain dollar amount be claimed on tax returns, many states have laws that specifically forbid it. The problem arises with the interpretation of fantasy football as a game of chance or skill.

Many states forbid any type of game in which participants pay a fee and receive winnings, if the results are determined by chance (essentially gambling). However, many proponents of the game argue that winning isn’t strictly based on chance, but on the team manager’s skill in strategically picking and playing the NFL athletes that are the most likely to win.

Which states are the most favorable/unfavorable to the game?

Currently, Florida has the strongest stance, specifically naming pay-to-play fantasy leagues as strictly prohibited. The Kansas Racing and Gaming Commission also addresses fantasy leagues unfavorably. It’s not clear, though, how strongly the government is pursuing violators, especially since big-name fantasy sites like Yahoo’s have prize leagues open there.

Other states, such as Arizona, Iowa, Louisiana, Montana, and Vermont, have laws that are less specific but prohibit fee-based games with winnings due to chance. On the opposite end of the spectrum are states such as New Jersey, which interpret fantasy football as a game of skill and not chance; and Maryland, where a supportive law was passed last year.

Should you play?

There’s no federal law outlawing the type of gambling associated with fantasy football leagues. It’s wise, however, to consider the laws in your particular state and whether or not you’re crossing the line into illegal activity.

As fantasy leagues become more popular, the laws in each state will need to be revised — so that they more specifically address the concerns they create, and more concretely define their legality.

Do you play fantasy football? Do you believe it should be legal?

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  • Lenny Pappano says:

    Fantasy Football is a game of skill. Why in the world are folks in government (or elsewhere) concerned about where I spend my money? The got the government in zillions of dollars in debt. Don’t they have other things to worry about?!!…

  • It should be legal. We are adults who must decide for ourselves what to spend our money on: food, drink, cars, sports, games, or whatever we want to do with the money.

  • Phil says:

    You have to wonder if Big Brother and the bureaucratic politicians are looking out for you, or if they have a financial agenda. I still find it mind-boggling that the lottery is legal (the state makes too much money for it not to be), but me getting together with friends to “gamble” could get me in trouble.

  • Debt Blag says:

    I don’t think participation would go too far down if less money were involved; seems like the bit of money just primes the pump.

  • Steve says:

    I couldn’t care less about fantasy football. I have a life!

    • Debt Blag says:

      In fantasy football, you play against friends and it’s good motivation to get together with friends to watch football, so there’s a social aspect to it. In other words, it could fit very easily into “having a life.”

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