West Virginia Rules DFS Game of Skill; No it’s Not, Says Delaware

Posted on: July 12, 2016, 06:00h. 

Last updated on: October 12, 2016, 08:41h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

West Virginia and Delaware are two states that have no plans to legalize daily fantasy sports in the near future, and for two very different reasons. Two attorneys general, 400 miles apart, have demonstrated two very different opinions on the legality of the contests over the past few days.

On Monday, West Virginia’s AG ruled that there was no need to legalize DFS because it was prominently a game of skill and therefore perfectly legal under West Virginia law.

“We read state law to prohibit only betting upon games decided at least predominantly by chance,” wrote Morrisey in his opinion. But DFS, he said “are determined predominantly by skill, knowledge, and athletic performance.”

Whether West Virginia will now move to regulate and tax the DFS industry, as its neighbor Virginia became the first US state to do at the beginning of the year, is of course a matter for the legislature.    

Delaware Pulls the Plug

In stark contrast, Delaware pulled the plug on DFS last week, with its AG, Matthew Denn, ruling, perhaps more controversially, that the contests were pretty much games of chance.

“Relying on the Delaware Constitution, as well as State and Federal case law, DOJ attorneys determined that online fantasy contests that involve payment for playing and monetary rewards constitute gambling because chance, as opposed to skill, is the dominant factor in the outcome of these contests,” said Denn.

“The most skilled participants might lose and less skilled participants might win because of what actually happens during the real-life game. In other words, real-life players are human and human behavior is unpredictable.

“While it is acknowledged that certain individuals may use their respective sports knowledge in selecting their fantasy players and otherwise participating in such contests, that factor alone does not make the contests games of skill.”

Precursor to Regulation?

Denn said that he had written cease and desist letters to DFS sites operating in Delaware, including DraftKings, FanDuel and Yahoo. There has been no formal statement from any operator on the matter, nor any indication of whether they intend to comply.

Of course, the AG’s ruling would not preclude the legislature from passing a law to legalize and regulate DFS in the future; indeed, similar rulings from DA’s in other states have proved to be a catalyst for the passing such legislation, as was the case in Tennessee and Mississippi earlier this year.

A bill to regulate DFS was introduced in the Delaware House at zero hour at the end of the legislative session on 30 June, but could was too late be pushed through.

“We are certain that many Delaware residents and visitors would enjoy participating in the full array of fantasy sports contests, including those that require payment for participation and have cash awards,” concluded Genn. “But until such contests can be offered legally, the DOJ must enforce the law.”