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Network for Public Health Law

The Link between Daily Fantasy Sports and Problem Gambling – a Public Health Concern

April 27, 2017

Overview

Not a lot of people think “public health” when examining state laws and policies regulating gambling—but public health professionals should. This is particularly true with respect to daily fantasy sports (DFS) because of its association with problem gambling conditions.

“Fantasy sports isn’t gambling…is it?”

Not a lot of people think “public health” when examining state laws and policies regulating gambling—but public health professionals should. This is particularly true with respect to daily fantasy sports (DFS) because of its association with problem gambling conditions. DFS allow players to place monetary bets on the statistical performance of real world athletes and can be done on a game-by-game basis. There is a regulatory conundrum in this area, however, as some states define gambling as including DFS, some specifically exclude DFS from the definition of gambling, and many fail to address DFS explicitly, creating uncertainty for consumers and the DFS industry.

Daily fantasy sports games and mobile device applications have quickly become a part of Americans’ everyday lives. Many professional sports organizations have embraced DFS to increase participation and competition. But, with this quickly expanding industry come public health concerns. About two million (1 percent) of American adults meet the criteria for “pathological” gambling and another four to six million (2 percent) are considered “problem gamblers” or gamblers that are at risk of developing a severe gambling problem. Children can also be problem gamblers. Those under the age of 18 can gain access to DFS websites using a prepaid credit card, or a parent’s credit card, and are more likely to develop gambling related problems as adults. The social cost of problem gambling is at least $7 billion per year, including job loss, bankruptcy, and criminal justice costs. DFS offer an additional opportunity for gambling exposure, for both adults and minors, and must therefore be regulated accordingly.

The federal government exempted fantasy sports from the Unlawful Internet Gambling Enforcement Act in 2006; at that time, fantasy sports typically consisted of a small group of people, likely friends or colleagues, creating a league in which they competed against each other over the course of an entire season. At that time, large-scale sports betting was something only found in Nevada and criminalized across the other 49 states. The exemption of fantasy sports from the federal law paved the way for creation of a new gambling industry and the need for states to regulate that industry.

Entrepreneurs quickly saw the opportunity created by the law and developed an entirely new sports betting industry. Fantasy sports has matured from season long, small-pool betting into an industry allowing a consumer to play against thousands of people at once at a more accelerated pace. Players can now make large, short-term bets on a weekly or even daily basis, on any game, in any sport.

Approximately 75 million people played a fantasy sports game in 2015, spending $4.6 billion dollars. DFS games have created a new generation of problem gamblers who have grown up in a world where DFS is socially acceptable and often not even thought of as “real” gambling.

The relatively cheap cost of participation, the frequency of contests, and the ready availability of the games on one’s smartphone can serve as a trigger for gambling relapse for individuals currently recovering from gambling addictions. The target audience and biggest user of fantasy sports also happens to be a population at greatest risk for developing problem gambling behaviors: young males.

DFS games are attractive to people who may not have gambled before. The uncertainty surrounding what constitutes gambling complicates the issue from a public health perspective. Individuals participating in these DFS games are often unaware that there is even a risk to these activities. As noted above, DFS laws vary widely by state. Including DFS in the definition of gambling in state law provides some deterrent and education, but more can be done. At a minimum, DFS operators should implement appropriate age controls and verifications, not advertise or run promotional activities at school or college events, provide clear information on game rules and expected payouts, and include information on voluntary exclusion, setting limits, signs of gambling addiction, typical player wins and losses, and links to problem gambling information.

Regardless of whether a state defines gambling as including DFS, regulators and public health professionals must make a point of protecting vulnerable populations susceptible to a gambling addiction. Education of players, lawmakers and public health professionals is key to making this new American pastime safer for all who participate.

Network attorneys are available to answer questions on this and other public health topics at no cost to you, and can assist you in using law to advance your public health initiatives. Visit the Network’s website for a list of Network attorneys in your area.

This blog post was developed by Mellissa Sager, Staff Attorney, Network for Public Health Law—Eastern Region. The Network for Public Health Law provides information and technical assistance on issues related to public health. The legal information and assistance provided in this document does not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state.

Support for the Network is provided by the Robert Wood Johnson Foundation (RWJF). The views expressed in this post do not necessarily represent the views of, and should not be attributed to, RWJF.