Fantasy football business is no gamble to NFL
For many NFL fans, there are millions of dollars up for grabs over the final weeks of the season. They watch every game, every player, in the hopes that those receivers, running backs and quarterbacks can turn small investments into big money.
Their hopes are pinned on the fates of their fantasy football teams. Sounds a lot like gambling, doesn’t it? But in the eyes of the NFL and the legal code of the United States, there’s nothing illegal about it.
Fantasy football received a free pass in a recently signed law that seeks to ban most online gambling, specifically targeting online poker. The law, signed by the president in October, was backed by the NFL and its well-paid lobbyist.
“It’s hard to assume anything,” said Anthony Cabot, an attorney who specializes in gaming law and Internet gambling. “But it’s fairly clear from the correspondence related to the bill that an NFL lobbyist was, in fact, very active in the effort to get this bill passed. And there’s no question the NFL is a significant beneficiary of the exemption on fantasy sports.”
An estimated 12.8 million players, including a handful of NFL players themselves, play fantasy football.
The NFL says there was no explicit effort to get the exemption, which excludes “participation in any fantasy or simulation sports game,” worked into the bill.
“Fantasy football has never been considered gambling by congressional leaders,” league spokesman Brian McCarthy said. “As a result, there was little if any discussion about the issue at the time the Internet gambling bill was signed into law earlier this year.”
The NFL has long opposed gambling on its games, a stance that stemmed from former NFL commissioner Pete Rozelle’s fear of tampering by organized crime. The league’s antigambling position revolves around the integrity of the game. Though it’s not legally considered gambling, fantasy football does bring up issues for some.
A number of gambling experts conceded they were a little taken aback when asked about the fantasy exemption.
“Frankly, it’s an issue that has been under-discussed,” said Andrew Smith, director of research at the American Gaming Association. “I certainly read news clips every day that relate to the gaming industry, and this issue of fantasy sports falls under that umbrella.”
A descendant of rotisserie baseball, fantasy football took off about five years ago, around the same time the Internet became commonplace. Fantasy football was concocted as another way for fans to follow America’s favorite sport.
Participation in fantasy sports grows between 7 and 10 percent each year, and the economic impact is estimated between $1 billion and $2 billion annually, according to a recent study done by the Fantasy Sports Trade Association and University of Mississippi.
Yahoo is the largest fantasy football site, its popularity based mainly on its strategy of offering leagues for free.
The next two biggest fantasy sites are cbssportsline.com, with 1.3 million users in the fall of 2003, according to a study by Nielsen NetRatings, and espn.com. Those sites charge between $14.95 and $500 to participate in leagues. In many cases, prize money goes directly from the site to the league winners. Millions more dollars exchange hands among prize pools created by the players.
Those Web sites are affiliated with two networks who combined to pay the league about $1.7 billion to televise this season’s games. The NFL’s web site, nfl.com, also links to the fantasy site run by cbssportsline.com.
“It doesn’t seem to be consistent,” Nelson Rose, an expert on gambling law, said of the NFL’s approval of fantasy football. “It doesn’t make sense to me given how antigambling the pro and college sports have always been.”
Gene Upshaw, chief of the players union, said it’s ridiculous to assume NFL players are doing anything sinister by playing in fantasy leagues.
“Fantasy football is expanding the game, and anytime you do that, I don’t see that as being negative,” Upshaw said. “We haven’t had any issues whatsoever. I don’t think it’s related to gambling. That’s a stretch, a real big stretch.”
Despite the league’s antigambling pledge, wagering on the NFL has taken on a life of its own over the years, greatly adding to the league’s popularity.
Injury reports, introduced to promote the idea of transparency and reduce the specter of tampering, add a key element to the gambling mix. Point spreads also are widely published online and in newspapers.
A record $94.5 million was wagered legally in Nevada on last season’s Super Bowl. In the fiscal year ending June 30, $1.079 billion was wagered in Nevada on college and pro football combined; the Nevada Gaming Commission doesn’t break down the amount bet specifically on the NFL.
The NFL lobbied on behalf of the recently passed Unlawful Internet Gambling Enforcement Act that bans most online gambling and criminalizes funds transfers -- save transactions related to fantasy sports, as well as other exclusions such as horse racing.
According to congressional lobbying disclosure reports, the NFL was billed $700,000 in 2005 by the lobbying firm of Covington and Burling for the services of Martin Gold, a former aide to Senate Majority Leader Bill Frist. Gold lobbied on behalf of the league on issues such as Internet gambling and curbing the use of steroids in sports.
Frist, who is leaving the Senate in January, attached the gambling act to an important port security measure on the last day of the Senate’s fall session, without any discussion, and the entire bill was passed that evening.
It earlier passed the House, 317-93.
“The way this bill was approached was to look at Internet gambling as gambling defined as games of chance,” said Alise Kowalski, spokesperson for House co-sponsor Rep. Bob Goodlatte, R-Va. “Congressman Goodlatte viewed fantasy football as more skill-based than a game of chance.”
Kowalski said she didn’t know the specifics of how the fantasy exemption got into the bill and did not return later messages from the Associated Press to clarify that question.
In fact, none of the bill’s sponsors in the House or Senate would say the how exemption for fantasy football ended up in the Unlawful Internet Gambling Act.
Neither Gold nor Frist’s press officer, Amy Call, returned multiple messages left by AP, seeking comment on the NFL’s role in the legislation. The spokesman for another backer of the gambling measure, Sen. John Kyl, R-Ariz., also didn’t return messages.
The spokesman for Rep. Jim Leach, R-Iowa, a bill sponsor who in November lost his bid for a 16th term, said Gold was the NFL’s point man for the bill and referred all questions to him.
The point made by Goodlatte and the NFL, that fantasy football isn’t gambling, does carry weight in the law.
The Merriam-Webster dictionary defines the word “gamble” as “to play a game for money or property” or “to bet on an uncertain outcome.”
In legal circles, determining whether something is gambling is largely based on if there is an element of chance involved, as opposed to strictly a skill-based proposition.
For instance, some chess web sites aren’t deemed illegal, because the game is almost universally recognized as 100-percent skill-based. Online poker aficionados -- the ones the new Internet gaming law targets -- say their game is all about skill, but the fact that it involves the turn of a card adds an element of luck that makes the game more vulnerable to being deemed a game of chance.
Interpretations of the law, which vary from state to state, set different thresholds for how much chance must be involved for an endeavor to be considered gambling. A lawsuit by a Colorado man seeking recovery of his fantasy football losses recently was filed in New Jersey because the law there says if chance plays a material role, it is gambling.
“Players pay [$1 billion to $1.5 billion] dollars a year to play in these leagues, which the operators contend do not violate most state antigambling laws because they involve contests of skill,” the plaintiff, Chuck Humphrey, wrote in an Internet posting explaining his lawsuit. “However, the contests are games of chance because outcome is primarily determined based on the ever-present human element involved.”
The chance-skill debate could be argued indefinitely.
Certainly, it takes skill to put together the right team and manage it over a long season. But there’s also an element of chance -- the star receiver could break his leg before halftime -- just as there is in betting on an NFL game.
Also, as fantasy football grows in popularity, many mini-leagues that have one- and two-week seasons are being offered -- much less of a skill-based proposition than a seasonlong commitment.