Consider the envelope pushed.
As was first reported by ESPN Chalk’s David Purdum, Atlantic City’s Resorts Casino is preparing to launch a new product that will test the boundaries between sports betting and fantasy sports.
The product, FastPick, is a house-banked fantasy sports parlay game that is the closest thing to sports betting available outside of Nevada.
According to Purdum, FastPick will first launch on a standalone website. Pending official NJ Division of Gaming Enforcement approval, FastPick will be integrated into Resorts’ online casino and the property’s iGaming Lounge.
Resorts is in the process of adding a cashier cage and new video screens as it prepares for FastPick, as well as the debut of virtual sports in New Jersey.
Sources close to the situation indicated FastPick, virtual sports, or both could be available at Resorts by the end of May.
Impact on sports betting fight
The timing of the announcement of FastPick is interesting, considering New Jersey’s ongoing efforts to legalize sports betting.
New Jersey is currently waiting for the Supreme Court to decide if it will hear the state’s appeal. The SCOTUS is waiting for the Solicitor General to weigh in before it makes its decision.
The general consensus is the state would try to avoid anything that might jeopardize its case.
At GiGse 2017, George Rover, a former DGE deputy director turned consultant, was asked to handicap New Jersey’s current DFS bill. He said it’s unlikely that anything remotely related to sports betting would be taken up in New Jersey until the sports betting case was decided.
The decision to authorize FastPick before a final decision is made on the sports betting case demonstrates a level of confidence within the DGE that the product will pass muster if challenged.
Daily fantasy sports in New Jersey
The New Jersey DGE has temporary regulations governing games of skill. But as Rover notes, legislation expressly legalizing DFS has not been passed. Therefore, DFS is a negative attorney general opinion away from a quagmire, as was the case in neighboring New York.
New York is a good case study. New Jersey’s skill versus chance law mirrors that of New York, where Attorney General Eric Schneiderman put forth a negative legal opinion that shut down DFS in the state until legislation authorizing DFS was passed.
But New Jersey hasn’t gone after the DFS industry the way New York did. The state is unlikely to challenge FastPick since it will be offered through at least one of the state’s licensed casinos. But without legislation, and with a new administration taking over in 2018, DFS and products like FastPick have little legal clarity.
And it’s not as if DFS has been without legal challenges:
- Ten state attorneys general have written negative legal opinions concerning DFS.
- Most DFS companies do not operate in 11 states. The legality of DFS in a half dozen other states is questionable.
Toeing the fantasy sports exemption line
FastPick might have UIGEA issues too.
FastPick is admittedly pushing the fantasy envelope.
“We wanted to get something as close to a traditional single-game play as we [could], but still have it be compliant with fantasy rules,” Joe Brennan, the CEO of SportAD, the parent company of FastPick, told Purdum. “I think this is as close as you can get right now.”
The question is, does it step over the line?
UIGEA author never anticipated DFS
Daily fantasy sports as a consumer product was reverse engineered to conform with a fantasy sports exemption included in the 2006 Unlawful Internet Gaming Enforcement Act.
The fantasy exemption in UIGEA was designed to protect friendly season-long fantasy leagues. But it also provided some sharp individuals with a roadmap to craft contests that adhered to federal law, but with all the hallmarks of betting.
The author of the UIGEA, Jim Leach, is on the record as saying:
“The assumption was that while unconstrained Internet gambling could change the nature of America’s savings and investment patterns, fantasy sports would be a ‘de minimus’ footnote. No one ever conceived of it becoming a large scale activity or that it could transition into one-day contests.”
Is it fantasy sports or sports betting?
To answer this question it’s important to look at the precise wording of UIGEA, and the bolded parts specifically:
(ix)participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:
(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
(III)No winning outcome is based—
(aa) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or
(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.
Why this matters
Here’s why this is important.
A DFS lineup can have a dud and still win, as the point total is based on the combined score of all selected players.
This is not the case with FastPick.
FastPick is essentially a fantasy parlay wager. Players select from three to ten heads-up matches selected by FastPick. They must pick the player that scores the most fantasy points in each matchup.
Per the SportsAD.co website:
“In its simplest form, Users make predictions on which athlete will score more from our pairings. Results are based on our rigorously formulated scoring schemas and winnings determined by the number of selections made.”
The game seems to conform with the UIGEA fantasy exemption in that players cannot win based on the individual performance of a specific player or team.
But UIGEA says, “all winning outcomes… are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.”
Unlike traditional DFS, users can’t win playing FastPick unless every selected player turns in a good performance. Therefore one could argue that a result in FastPick is predicated on the individual performance of every player selected.
Each selected athlete’s individual performance determines if players win or lose rather than the accumulated performance of an assembled group of players.
I’m not sure FastPick violates the UIGEA fantasy exemption. But it is a step beyond DFS, and will likely be scrutinized ad nauseam.
Normalizing legal sports betting
Beyond the “is it gambling or skill-based gaming?” questions, it will be interesting to see what impact the blurring of the lines between fantasy sports and sports betting has on the sports betting legalization efforts currently gaining momentum across the United States.
As products like FastPick and virtual sports roll off the assembly line, they could normalize legal sports betting in the eyes of the public, and by extension, lawmakers.
If people view these games as sports betting by a different name, at some point it will dawn on everyone that certain types of “sports betting” are already legal. They will also view companies offering them as capable of handling legal sports wagers.
