A U.S. House Subcommittee recently held a hearing to explore the legal status of an industry that many New Yorkers hold dear: Daily Fantasy Sports, or DFS for short.

There are two major players in this industry, and one of them is headquartered in Manhattan. Additionally, professional sports leagues have taken an ownership interest in the DFS providers in recent years. So why, then, is the business of these leagues unavailable to New Yorkers?

Chance vs. Skill

The answer lies in the way the state’s gambling laws are worded. A “contest of chance” is an event where the outcome is not under the control of those making the wager. If somebody tosses a coin in the air, it could end up heads, or it could end up tails. That is the definition of chance.

Some states allow for gambling based on the involvement of an element of skill. The Daily Fantasy Sports leagues proclaim, at every opportunity, that skill is required to do well in their games. Knowing which players play better in which situations, and knowing which players to draft for their teams, is anything but a game of chance, according to the proprietors of these leagues.

But the laws of New York do not make provisions for such games of skill. As long as money or something of value is wagered, to be returned based upon the outcome of a particular event, it is considered “gambling” and is therefore not allowed in New York.

The Players Can Still Play

It must be pointed out that New York law does not make participation in DFS leagues illegal. What is illegal, however, is organizing such gambling activities. By accepting wagers and paying out monies based on the results of sports contests, the DFS providers place themselves in significant legal jeopardy.

So how can New Yorkers legally get in on the action? There are two different solutions at the moment. The first is to offer free games to New York residents. By not accepting any wagers, and not paying out any prizes, the DFS leagues can make their basic services available, without realizing any profits from the results. The DFS leagues already make money in the states where they can legally operate, and keeping the door open for New Yorkers to approximate the experience keeps them in the game, so to speak.

Betting on a New Law

But another, more permanent solution is to change the state’s gambling law altogether. A June 30 deadline has been established, for the legislature to enact a law which specifically allows DFS leagues to operate in New York. If the deadline is not met, the leagues will cease to operate in New York until a ruling from an appellate court is handed down, likely in the Fall.

New York was the largest state market for the DFS leagues before they ceased operations in the state last March. With baseball’s regular season now roughly 25 percent over, it is hard for sports-minded New Yorkers to continue sitting this one out. If a resolution should be reached in the coming weeks, it will lead to an “Opening Day,” of sorts, for sports fans throughout New York.

Playing in DFS leagues is not illegal in New York, but organizing such leagues still is. Have a criminal charge in New York? Let the AX criminal team offer you a free case consultation anytime; (518) 675-3094.

DISCLAIMER: The exclusive purpose of this article is educational and it is not intended as either legal advice or a general solution to any specific legal problem. Corporate offices for Nave + Associates (formerly Anelli Nave) are located at 432 N. Franklin Street, Suite 80, Syracuse, NY 13204; Telephone No.: 1-866-792-7800. Prior results do not guarantee a similar outcome. Attorney Advertising.