Sports Law Blog
All things legal relating
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Sunday, July 30, 2006
The Law, Politics, and Linguistics of Fantasy Sports
Tim Lemke of the Washington Times has an excellent piece on how courts and Congress may address the growth of fantasy sports ("Licensing Case Could Hurt Rotisserie Sports," 7/29/2006). As also discussed recently by Geoffrey Rapp and Greg Skidmore (Geoff's post; Greg's post), Major League Baseball, which requires fantasy sports operators to obtain a license to use MLB statistics, is scheduled to go to trial on September 5 in a federal case against CDM Sports, a fantasy sports operator that claims that statistics generated by MLB players and teams should be useable without MLB's permission. In other words, CBC and MLB disagree on whether MLB has intellectual property rights in publicly-available statistics. Significantly, this is a case of first impression for fantasy sports, and should a holding eventually emerge (i.e., if the parties don't settle, which they probably will), it would have precedential value.
Considering that more $4 billion is spent annually on fantasy sports--with fantasy football and fantasy baseball leading the way--leagues obviously have an interest in obtaining as much fantasy sports revenue as possible. So what legal arguments can they use to obtain that revenue? Here are a few arguments, each with its own set of flaws:
1) Statistics generated purely by league activities (i.e., the playing of games), comprise legally-protected league work product.
2) Fantasy league operators are using statistics not for a newsworthy purpose, but rather to profit off of them, and to do so with neither obtained consent nor payment made. There is precedent for this reasoning: baseball card companies and videogame companies must pay a fee for the use of team logos/colors/statistics etc., just as they must pay a fee for player names/images/statistics etc.
3) One might analogize league required licenses for commercial use of statistics to how movie and music industries require licenses in order to prevent pirated products.
Lemke also discusses how a recent effort by Congress to curb online gambling has exempted the fantasy sports industry. Specifically, in all three bills introduced in the 108th Congress that seek to prohibit Internet gambling (H.R. 21, H.R. 2143, and S. 627), the definition of “bets and wagers” excluded two types of activities: 1) certain financial instruments (stocks, commodities, derivatives, and insurance products) and 2) fantasy sports leagues.
Lemke interviews Christine Hurt and me for the political portion of story:
Why the exemptions?There's another portion of this topic to consider: the very use of the word "fantasy," almost as if
fantasy sports are somehow make-believe, even though real money is often used.
So what then distinguishes "fantasy" sports from online "gambling"? There are probably several things, including:
1) Fantasy sports are often more about staying in touch with friends and winning grudge matches than about making money; the subjective value of beating your friends in fantasy football is probably more valuable than the few hundred bucks you might make.
2) Some fantasy sports leagues do not involve money changing-hands, and are thus clearly not gambling in any way.
Any other thoughts about fantasy sports? Are they, in fact, "sports," much like poker or spelling bees are now apparently sports?