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Tuesday, August 15, 2006
New Federal Lawsuit on Whether Fantasy Sports Are Forms of Gambling

Tresa Baldas of the National Law Journal has a feature story on a complaint recently filed in the U.S. District Court for New Jersey asserting that,, and are engaging in illegal gambling by hosting pay-to-play fantasy leagues with lucrative prizes (also available on, 8/14/2006). The claim is being brought by Charles E. Humphrey, Jr., a Colorado attorney whose practice focuses on gambling law. He filed his suit in New Jersey because of that state's gambling loss recovery statute, which, interestingly enough, was originally passed in 1710 to protect English aristocrats from gambling away their inheritance and allows for a "private attorney general," or qui tam plaintiff, to recover half of gambling losses, with the other half going to the state. As Baldas notes, six other states, and the District of Columbia, have similar laws allowing a third party to recover gambling losses-Georgia, Kentucky, Illinois, Massachusetts, Ohio and South Carolina.

Humphrey contends that fantasy players can often lose because of circumstances beyond their control, like plain bad luck. Specifically, he said that if a baseball pitcher throws out his arm, or a football player twists an ankle, or a coach pulls out a star player to give him a break, those are all circumstances beyond the player's and bettor's control and thus consistent with a game of chance.

Humphrey's lawsuit is apparently causing great consternation among fantasy sports operators, and has elicited response from their lawyers that fantasy sports are about skill:
The lawsuit has raised some commotion in the fantasy sports industry, which has invited a team of attorneys to discuss the potential impact of the suit at the 14th Fantasy Sports Trade Conference in Las Vegas on Aug. 30.

"People of course are nervous about [the lawsuit] but the general feeling in the industry is that fantasy sports are not gambling," said Glenn Colton of the New York office of Palo Alto, Calif.'s Wilson Sonsini Goodrich & Rosati, who will speak at the conference. Colton, who also represents the Fantasy Sports Trade Association, doesn't believe Humphrey's suit will succeed.

"I think that the premise that [a fantasy sport] is more chance than skill is simply wrong," Colton said. "There are very large number of ways in which someone can skillfully and intellectually predict how a player is going to perform." For example, Colton said, a fantasy football player can study offensive coordinators' techniques, evaluate who gets the ball more often-wide receivers or running backs-or study a quarterback's performance.
Baldas also interviews Attorney Rudolph Telscher and me:
Michael McCann, who teaches sports law at Mississippi College School of Law, does not think Humphrey's suit will prevail.

"Fantasy sports just don't strike people as immoral. Even if his argument is technically correct, it lacks the moral weight that is so crucial in many other litigations," McCann said. He added that the name of the game itself-fantasy-"attempts to suggest that it's not real, that there's an innocence to it."

Attorney Rudy Telscher of Harness, Dickey & Pierce in St. Louis recently won a case on behalf of a baseball fantasy league operator suing over the rights to use player statistics.

Major League Baseball argued that fantasy leagues needed a license to use the information. But on Aug. 8, a federal judge ruled that fantasy baseball operators do not need licenses to operate such leagues. C.B.C. Distribution and Marketing v. Major League Baseball Advanced Media, No. 4:05-CV-00252 (E.D. Mo.).

Telscher said that the ruling was a big win for fantasy operators, which would have had to shut down had the judge ruled otherwise, and for fantasy players, who may have had to start paying fees for player statistics. "I think a loss would have definitely crippled [the fantasy industry]," he said.
We'll keep you posted on Humphrey v. Viacom Inc., No. 2:33-av-00001 (D.N.J.). For other coverage of fantasy sports on this blog, please click here.


Looks like Humphrey's odds at winning this lawsuit are actually "bettor" than his odds at winning real poker tournaments, too.

Anonymous Anonymous -- 8/15/2006 9:25 PM  

I believe fantasy sports are skill games that involves a degree of luck, but I do also believe that poker similarly is a skill game with some luck. I enjoy both and wish both were legal.

Blogger Chad McEvoy -- 8/16/2006 3:15 PM  

After reading this complaint, I see why there was "frivolous lawsuit" night at an Altoona Curve home game back in June. I also think that winning a lawsuit requires some luck, too, but I think most would say that the practice of law requires some skill, too.

Anonymous Anonymous -- 8/16/2006 3:30 PM  

I think Fantasy Sports shouldn't involve money. I enjoy beating my buddy more than I do trying to make an extra buck.

Anonymous Ron Jumper -- 8/16/2006 3:47 PM  

Thank you for these excellent comments.

Anonymous 1: Thanks for the link, but I'm not sure that's the same guy. The Charles E. Humphrey, Jr. on the link seems to be from Palm Desert, California, while the attorney in the story is from Lakewood, Colorado.

Chad: I agree with you on fantasy sports and poker--there seems to be real skill involved with both. I also think that if they were entirely about chance and luck then they wouldn't draw the interest of so many people; if people want to gamble on luck, then buying a lottery ticket or scratch ticket would seem like a more direct route.

Anonymous 2: It's interesting that you bring up the practice of law in regards to luck/skill. Although I agree that skill can make a huge difference in a case, I also believe that the outcome of a trial is too often seen as a proxy for how well the attorneys did. Every attorney (and you may be one yourself) will tell you that the better lawyer doesn't always win, and in fact, loses more often than most would suspect. But mankind tends to be outcome-oriented (as opposed to process-oriented), so I guess that is not surprising.

Ron: I think you've nailed it--fantasy sports, even when they involve money, really aren't about money. I suspect that for most, the subjective satisfaction of beating your friends is worth way more than the $100 bucks you might win in a pool.

Blogger Michael McCann -- 8/17/2006 1:18 AM  

Wanna bet that it's the same Humphrey? I wonder if he knows this person, too:

Anonymous Anonymous -- 8/18/2006 11:24 AM  

Fantasy Sports shouldn't involve money. Beating your friends is the point!

Anonymous golf schools -- 8/26/2006 4:25 PM  

If anyone wants to know more, a recent development was written on this case for the North Carolina Journal of Law and Technology. It is available at:

Blogger Christy -- 3/30/2007 12:51 AM  

I see that the conclusion to this lawsuit was found in favour of the defendants. This reafirms that fantasy sports are legal in most (all?) areas of the United States. Is this also true for Canada? (My home country) Can I legally start up a football pool through CBS or yahoo? And is it legal for them to offer this service?

Anonymous Anonymous -- 2/14/2008 2:14 PM  

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