Fantasy sports contests generally require participants to pay an entry fee which may become part of a prize pool. But it is the classification of fantasy sports as a game of skill that keeps it from being lumped together with questionable online gambling practices. The Unlawful Internet Gambling Enforcement Act (UIGEA) Law of 2006 excluded fantasy sports from online betting rules; however, all games must still abide by state gambling laws.
According to the UIGEA, a fantasy sports league is legal if it abides by the following rules:
- All prizes are made known to the participants before the start of the game.
- Prize values aren't based on the number of players or amount of fees paid.
- Wins aren't based on the score, point-spread or performance of a single real-world team or teams.
- Wins aren't based on the performance of a single athlete in a single real-world sporting event.
- Winning is based on the skill and knowledge of the participants.
McKenna, Ben. Is Your Fantasy League a Federal Crime? The Legal Blitz, November 16, 2011, http://thelegalblitz.com/blog/2011/11/16/is-your-fantasy-league-a-federal-crime/
Daily Joust. Legality of DailyJoust.com, http://www.dailyjoust.com/help/legality
Fantasy Sports Trade Association Press Release June 12, 2012, http://www.fsta.org/blog/fsta-press-release