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Rivalry Games is offering what appears to be a “one-game” fantasy contest for the Super Bowl, raising questions among some about the viability of the company’s model under the UIGEA.
While daily fantasy sports have taken off in popularity in the past year, the market for “one-game” contests is still trying to find its footing.
There appear to be serious questions regarding whether this type of fantasy contest runs afoul of the 2006 Unlawful Internet Gambling Enforcement Act, which includes a carveout for fantasy sports.
Rivalry Games launched Rivalry Fantasy Sports in 2014, with contests available for football, basketball and baseball.
In this “micro-version” of DFS:
Games are available for free and for prize money, with contest entry fees ranging from $1 to $100.
This is the part where things get a little murky legally. It’s true that the UIGEA allows entry fees to be taken in fantasy sports contests, and that they are not considered sports wagering, from a legal standpoint.
But the definition of fantasy sports, in regards to the UIGEA carveout, appears to be pretty specific. Outcomes of fantasy sports contests must be “determined predominantly by accumulated statistical results of the performance of individuals . . . in multiple real-world sporting or other events.”
Obviously, the Super Bowl, or the other contests offered by Rivalry, are not contested over the course of “multiple” events, like other daily or season-long fantasy sports contests. Is this an important distinction, or just semantics?
Obviously, the federal government has always treated sports wagering — bets usually placed on single sporting events — as a different animal and monitors the practice carefully.
The “one-game” fantasy sports model certainly appears, on the surface, to share similarities with both sports betting and its DFS siblings.
In Las Vegas sportsbooks, you can wager on hundreds of prop bets related to the Super Bowl — who wins the coin toss, how many touchdowns a certain player will score, how many tackles a single player will make, etc.
Where the line is drawn between a prop bet and a one-game fantasy sports wager, when considered in concert with prop bets, is not entirely clear.
But is it possible to think of one-game fantasy contests as a series of independent events — the statistics accumulated by the six players picked for a fantasy team — rather than as a wager on a single sporting event or outcome?
We’re guessing this is one possible argument, but even a loose interpretation of the actual UIGEA definition of fantasy sports doesn’t seem to fit.
The only hint we get on the matter from Rivalry came from Justin Bauer, CEO and co-founder of Rivalry Games, on Reddit, in 2014:
While we agree that there are some fly by night companies that do not fully understand the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), we have spent the last year working to build a daily game that meets the requirements of the law. This is not just our opinion but is shared by our legal team at Pilsbury (sic) Winthrop, the leading experts in skill based gaming, as well as by our payment provider and the legal teams of multiple sports media and entertainment companies. Our unique form of gameplay meets the definition of fantasy sports according to the UIGEA as well as the Federal Wire Act, and we only operate in those states that allow skill-based competitions. If you have further questions or concerns I would advise you to reach out to our legal team at Pillsbury Winthrop or directly to Rivalry Games at [email protected]
Update: An email from ODFReport was sent to Rivalry regarding the UIGEA; this was the response, which falls in line with Bauer’s comments above:
With respect to your question regarding the UIGEA, yes, we are fully aware of the law and worked with a team of leading experts in the skill based gaming space to ensure that our design meets its definition of fantasy sports.
Clearly, Rivalry believes it doesn’t have a UIGEA problem, so it’s full steam ahead for the Super Bowl and beyond.
But under the glare of offering contests based on the Super Bowl, the company is obviously getting a lot more attention. A story at Forbes questions Rivalry’s offerings vis a vis the UIGEA, and whether it is considered online gambling or a fantasy sports contest.
It’s fair to guess that Rivalry and OGFS will encounter some more scrutiny this week and in 2015.