The office of Mississippi Attorney General Jim Hood joined a growing chorus of state AGs opining that daily fantasy sports is illegal under state law.
The news also came just minutes before the New York Times reported that payment processor Vantiv would no longer work with DFS operators DraftKings and FanDuel.
— NYT Sports (@NYTSports) January 29, 2016
The tally of negative attorney opinions on the legality of DFS is likely what has made Vantiv skittish regarding the industry.
The opinion for Mississippi on DFS
The request for an opinion on DFS originated with Allen Godfrey, executive director of the Mississippi Gaming Commission.
Hood’s opinion, written by deputy AG Michael Lanford, stated the following:
Fantasy sports wagering is illegal in the state of Mississippi under current law both on a licensed gaming floor and outside of a licensed gaming floor. Any change to the law would be a matter within the purview of the Legislature.
You can read the entire opinion here.
Godfrey also noted that the AG’s office has received “numerous requests for guidance on fantasy sports wagering both from Mississippi licensed gambling establishments and the general public.”
Inside the opinion
The opinion mirrors the thoughts of many previous AGs:
Not in a casino
The opinion starts by saying that DFS is not allowed inside a licensed gaming facility, citing the Mississippi Gaming Control Act, which says “no wagering shall be allowed on the outcome of any athletic event.”
From the opinion:
In this instance, a fantasy sports wager is controlled by matters that are determined during an athletic event, and by an event which does not take place on the premises.
Given the DFS industry’s legal defense in other states, attorneys will argue that a DFS entry is not a “wager,” but a ” fee” to enter a “game of skill.”
No DFS anywhere else, either
This time, the opinion cites a part of Mississippi gambling code that says it’s a crime if “any person shall encourage promote or play at any game, play or amusement … for money or other valuable thing…”
The opinion goes on to note that the amount of skill taken to play DFS is irrelevant under this section of the code.
The opinion goes on to consider Mississippi case law in which games of skill and games of chance are distinguished.
The opinion argues the “skill-game” argument cannot be applied to DFS:
The outcome of the wager in fantasy sports is not … “under the absolute control of the player from start to finish.” …It is beyond reasonable dispute that daily fantasy leagues involve an element of chance regarding how a selected player will perform on game day.
The actual contestant?
The opinions of AGs in some other states hinge on whether a DFS player is the contestant in the game of skill, or if they are just wagering on the outcome of games against others. The same issue is at play in Mississippi.
The opinion cites a previous AG opinion, in which “participating in foosball and pool tournaments is not prohibited … but that betting on such games would be.”
And the another opinion:
Similarly, in our opinion … we stated that it was not illegal for teams of citizens to compete for prizes donated by local businesses and organizations. Betting on the outcome of the scavenger hunt presumably would be, though that question was not asked.
In contrast, fantasy sports, although in the form of a tournament or contest amongst players to pick the best teams, also involves a wager upon the performance of others. It is this element together with the nature of the game that brings fantasy sports within the prohibition of the statute.
In our opinion, the possible existence of an element of skill in picking players in a fantasy sports game … is irrelevant to any charge of gambling on Fantasy Sports…”
The latest AG on DFS
Mississippi joins a long list of state officials saying DFS constitutes gambling vis a vis state law. The most recent came when the Hawaii AG offered an opinion this week.
- Illinois: AG Lisa Madigan tackled the issue with an advisory opinion in December that triggered a still-running court battle between her office and DFS operators.
- Nevada: An opinion from the office of AG Adam Laxalt in October came to the conclusion that DFS was gambling under state law and required a license to operate.
- New York: FanDuel and DraftKings recently won a stay of a preliminary injunction in their ongoing court battle with New York Attorney General Eric Schneiderman.
- Texas: Earlier in January, AG Ken Paxton issued an opinion saying that the courts would likely find that DFS is illegal gambling under state law. It does not appear he will take any action.
- Vermont: The AG’s office in the New England state declared DFS is illegal gambling under state law. There has been no sense of what, if any, action the Vermont AG might take.
Those are just the opinions that were negative for DFS, however. Other AGs who have said something about DFS:
- Massachusetts: AG Maura Healey has stated publicly that she believes DFS is legal under state law. She has also proposed regulations that would govern the industry. She has also publicly says she believes DFS is gambling, in a casual definition.
- Kansas: The AG issued an opinion in April of last year, saying that fantasy contests are games of skill, in the context of a bill that was introduced and later became law. Daily fantasy, however, was not specifically addressed.
- Maryland: The AG’s office issued an opinion saying that a 2012 law that legalized fantasy contests possibly should have gone to a referendum. Brian Frosh’s office urged the legislature to take up the matter again.
- Florida: AG Pam Bondi has repeatedly deferred to the U.S. attorney’s office in Tampa, where a grand jury has reportedly considered DFS.
- South Dakota: AG Marty Jackley has commented on DFS, but what he will do, if anything, is unclear.