Daily Fantasy Sports Carveout Survives in New Version of Online Gambling Ban Bill

Posted on February 4, 2015 - Last Updated on April 7, 2015

A carveout for daily fantasy sports is not affected by the newest version of the Restoration of America’s Wire Act, a bill to be introduced in Congress today that would ban online gaming and online poker in the United States.

Good news for DFS

While RAWA is bad news for most online gaming interests in the U.S., DFS appears to be unaffected once again, from a reading of the bill, introduced by Rep. Jason Chaffetz (R-Utah):

  • The bill only addresses changes to the Federal Wire Act.
  • It does not supersede other current state or federal law that prohibits online gaming.
  • The definition of daily fantasy sports isn’t mentioned.

The full text of the bill that Chaffetz will introduce can be viewed here.

UIGEA + RAWA = ?

The Unlawful Internet Gaming Enforcement Act, which became law in 2006, “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.” But the UIGEA exempted fantasy sports from its reach, which resulted in the growth of the DFS industry.

RAWA doesn’t mention the UIGEA, only “Section 1084 of title 18, United States Code,” which is the Federal Wire Act. It seeks to reword that law; the Department of Justice issued an opinion in 2011 that says the Wire Act only applies to sports betting online. RAWA would make all forms of betting online illegal. Because DFS has a carveout in the current law, it does not fall under the purview of RAWA, unless amendments are made to specifically include, or amend UIGEA. From RAWA:

Nothing in this Act, or the amendments made by this Act, shall be construed … to alter, limit, or extend — (A) the relationship between the Interstate Horseracing Act of 1978 (U.S.C. 3001 et seq.) and other Federal laws in effect on the date of enactment of this Act.

DFS safe… for now

Daily fantasy sports continues to avoid being lumped in with any type of sports wagering. This is likely because casino mogul and online gaming opponent Sheldon Adelson doesn’t view fantasy sports as any kind of a threat to brick-and-mortar casinos; he obviously does view online wagering as detrimental to the casino industry.

All that means it’s full steam ahead for daily fantasy sports, as long as no one challenges its unique position as a skill-based game outside of the realm of sports betting.

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Dustin Gouker

Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.

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