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How are one day fantasy sports sites legal but poker sites aren't?

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I don't have any problems with one day fantasy sports sites, I just don't understand the legal distinction.

DraftStreet.com, AFFL, etc. are set up just like poker sites. You can play for free, you can deposit money, they have freerolls to attract new players, they have deposit bonuses to attract new players, etc.

I love fantasy sports but it's no more of a game of skill than poker, especially if you're playing one day in baseball or basketball or one week in the NFL.

How did the same governing bodies that decided people can't play poker or bet games decide that this should be legal? Is it just better lobbyists or is it something else?

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Dan    0

I don't have any problems with one day fantasy sports sites, I just don't understand the legal distinction.

DraftStreet.com, AFFL, etc. are set up just like poker sites. You can play for free, you can deposit money, they have freerolls to attract new players, they have deposit bonuses to attract new players, etc.

I love fantasy sports but it's no more of a game of skill than poker, especially if you're playing one day in baseball or basketball or one week in the NFL.

How did the same governing bodies that decided people can't play poker or bet games decide that this should be legal? Is it just better lobbyists or is it something else?

The UIGEA had a carve-out for fantasy sports, state lotteries, and horse racing.

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wackyJaxon    12

The UIGEA had a carve-out for fantasy sports, state lotteries, and horse racing.

In retrospect, I'm actually a little surprised horse racing made it through since the casinos, OTBs, and tracks all lose business in the same way if not more so than the casinos that gave money to political machines that didn't allow the skill game of online poker to be included.

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Dan    0

In retrospect, I'm actually a little surprised horse racing made it through since the casinos, OTBs, and tracks all lose business in the same way if not more so than the casinos that gave money to political machines that didn't allow the skill game of online poker to be included.

I believe horse racing has a very powerful and influential lobbying force behind it in the U.S. It's also a very historic sport, which I think helps it credibility-wise.

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donkiman    0

The UIGEA had a carve-out for fantasy sports, state lotteries, and horse racing.

If I remember correctly, I believe the NFL was one of the major organizations pushing for the UIGEA. I have heard that the NFL actually gets a cut of the action across all fantasy sites for using their player's data.

I'm sure if online poker had a lobbying body as large as the NFL, poker would have been carved out of the UIGEA as well. Unfortunately, it was the opposite (casinos lobbying against online poker). But hey the government works for the people right?

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Adam    1

The basic answer is that activities like this get legalized in the USA when some sort of powerful American industry wants it to be legalized. This is why poker is now starting to make a run at legalization, at least in various states. The big existing interests (land based casinos) now feel ready to compete, so now it's a "moral" activity to them. Except Adelson (Sands/Venetian), presumably because he can't compete. The basic idea is that first a company or industry decides if it's beneficial to their bottom line for something to be legal. Then they set out a team of people to sell the public on some other unrelated narrative to back up their decision.

The UIGEA had a carve-out for fantasy sports, state lotteries, and horse racing.

This doesn't really tell the whole story, since the UIGEA didn't make any sort of gambling legal or illegal. But yes, the UIGEA, which affected payment processing for gambling websites, explicitly carved out those things.

In retrospect, I'm actually a little surprised horse racing made it through since the casinos, OTBs, and tracks all lose business in the same way if not more so than the casinos that gave money to political machines that didn't allow the skill game of online poker to be included.

Actually some people who were trying to stop the UIGEA tried to insert language that banned transactions for all online gambling including horseracing. The bill's main sponsor in the house at the time, Bob Goodlatte, was furious and called it a "poison pill." In normal people language, what that means is that there were so many Congressman and Senators in the pocket of the horseracing industry that there's no chance any law would ever pass that created any problems for their donors. In order to get the UIGEA passed, they HAD to omit horseracing.

On the other hand, the casinos were in favor of the UIGEA at the time, presumably for protectionist reasons.

If I remember correctly, I believe the NFL was one of the major organizations pushing for the UIGEA. I have heard that the NFL actually gets a cut of the action across all fantasy sites for using their player's data.

I'm sure if online poker had a lobbying body as large as the NFL, poker would have been carved out of the UIGEA as well. Unfortunately, it was the opposite (casinos lobbying against online poker). But hey the government works for the people right?

Yes, the NFL at least has to put on a facade of being against most sports betting. Even though they make absolute barrels of money off it because so many of their regular watchers are bettors. But you know, morals and family values and stuff.

because American companies are running the show in daily fantasy sports.

Bingo.

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Skallagrim    0

The basic answer is that activities like this get legalized in the USA when some sort of powerful American industry wants it to be legalized. This is why poker is now starting to make a run at legalization, at least in various states. The big existing interests (land based casinos) now feel ready to compete, so now it's a "moral" activity to them. Except Adelson (Sands/Venetian), presumably because he can't compete. The basic idea is that first a company or industry decides if it's beneficial to their bottom line for something to be legal. Then they set out a team of people to sell the public on some other unrelated narrative to back up their decision.

This doesn't really tell the whole story, since the UIGEA didn't make any sort of gambling legal or illegal. But yes, the UIGEA, which affected payment processing for gambling websites, explicitly carved out those things.

Actually some people who were trying to stop the UIGEA tried to insert language that banned transactions for all online gambling including horseracing. The bill's main sponsor in the house at the time, Bob Goodlatte, was furious and called it a "poison pill." In normal people language, what that means is that there were so many Congressman and Senators in the pocket of the horseracing industry that there's no chance any law would ever pass that created any problems for their donors. In order to get the UIGEA passed, they HAD to omit horseracing.

On the other hand, the casinos were in favor of the UIGEA at the time, presumably for protectionist reasons.

Yes, the NFL at least has to put on a facade of being against most sports betting. Even though they make absolute barrels of money off it because so many of their regular watchers are bettors. But you know, morals and family values and stuff.

Bingo.

Pretty much a good and complete analysis of how we got to where we are today.

Remember UIGEA was hardly a likely bill to pass the Senate at the time (2006). While new anti-online gaming legislation had overwhelming House support at that time, the Senate had failed to take up any number of House bills trying to accomplish that goal. To get the UIGEA passed by the Senate then Majority Leader Bill Frist had to engage in a number of compromise deals. Those deals are directly reflected in the UIGEA: the exemptions for state lotteries, horse-racing and fantasy sports.

Horse racing does have a lot of support, especially among rich Republicans (who are otherwise inclined to vote against gambling - but it s different with horses). A joke I used to make around that time was that the best way to get online poker legalized would be to require that it be played on horseback. :)

One ironic fact about fantasy sports is that it was indeed the NFL and MLB that really pushed for UIGEA and demanded the fantasy carve-out. Their power was enough to get both. But their motivation for the fantasy carve out did not last long. At that time the leagues wanted to charge for the use of the players statistical information (and make even more money). But a year or two after the UIGEA the Courts ruled that such statistical information was public domain and could not be copyrighted or monopolized.

And finally, getting up an organization, demonstrating support, and doing the proper lobbying is precisely why the PPA exists. Hopefully we can get strong enough (and it looks like we will someday, though that someday may be far off) that any future federal legislation in this area will create a poker carve out too.

Skallagrim

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ACheemz    0

I believe horse racing has a very powerful and influential lobbying force behind it in the U.S. It's also a very historic sport, which I think helps it credibility-wise.

Poker is historic, especially in the US.

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