Hawaii is No Paradise for Daily Fantasy Sports – Skill Measured by Average Players, not Experts
Hawaii AG Doug Chin is one of the latest to opine that daily fantasy sports are illegal under that state’s law. According to a press release accompanying the opinion, “Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under the person’s control,” said Chin. “The technology may have changed, but the vice has not.” The AG opined that DFS is both a game of chance and a future contingent event not under the person’s control.
As to the chance component, the opinion indicates that Hawaii uses the “material degree of chance” test, then states: [T]he test of whether a game is one of skill or of chance, or one in which skill greatly predominates over chance, is not to be measured by the standard of experts or any limited class of players, but by that of the average skill of a majority of players likely to play the game, for the purpose is to determine the primary object of the game and this is one of the ways of doing so.” According to the AG’s opinion, “For the tiny minority of top-performing players, skill makes a real difference in daily fantasy sports contests. But for the vast majority of players, chance predominates.”
The “future contingent event not under the person’s control” prong is similar to language found in the New York law. The meaning of this is hotly debated in the NY case. The DFS companies are arguing that the “event” is the competition by fantasy sports participants in trying to accumulate more points than other fantasy sports players, and that this is in their control. The NY AG alleges that the event is the underlying sporting events/athletes performances upon which the players predictions are based, and that these events are beyond the fantasy participants’ control.
In other developments, a DFS regulatory bill (AB 1437) passed the full Assembly in California. This bill would establish regulations for internet fantasy sports games. In Florida, proposed legalization and regulation of fantasy sports legislation (HB 707 and SB 832) took steps forward. In Indiana, SB 339 passed a committee vote. If enacted into law, this would legalize certain fantasy sports contests in Indiana (but exclude fantasy contests based college or high school sports).