Photo via Tom Newby/Flickr (CC BY 2.0)
In the past month, the two most popular daily fantasy sports sites have stopped operations in New York, FanDuel has pulled out of Texas, and DraftKings and FanDuel have forfeited the opportunity to offer action on NCAA contests.
Now, Alabama has gotten in on the action, as Attorney General Luther Strange released an opinion on Tuesday in which he said the DFS sites constitute illegal gambling. Though DraftKings and FanDuel contend their contests are games of skill and not games of chance (which would constitute gambling), Luther sent them cease-and-desist letters and said the sites have until May 1 to stop operating in Alabama.
“As attorney general, it is my duty to uphold Alabama law, including the laws against illegal gambling,” Strange wrote. “Daily fantasy sports operators claim that they operate legally under Alabama law. However, paid daily fantasy sports contests are in fact illegal gambling under Alabama law.”
Strange writes that illegal gambling is when a person bets something of value on a game of chance, even if skill is involved, in order to win a prize.
“There is, of course, a measure of skill involved in creating a fantasy roster,” he wrote. “But in the end, contestants have no control over the performance of the players on their rosters. For example, a player could fall ill before a game, be injured in pre-game warm-ups, or miss a large portion of the game due to injury or equipment failure. All of these factors, and many more, are outside the control of a fantasy sports player. Thus, the results of paid daily fantasy sports contests depend to a large degree on chance. This is the very definition of gambling under Alabama law."
Strange points out that 11 other states say that DFS contests are illegal, but other states have a different take. Virginia last month became the first state to legalize DFS sites, Indiana followed suit soon after, and Maryland wants its residents to decide the industry's fate.
Neither FanDuel nor DraftKings have commented on Strange's letter.