Daily Fantasy Sports (DFS) has become extremely popular across the United States with 43 of 50 states having legalized it. While there has been great momentum allowing DFS to sweep across the nation in recent years, there are a number of reasons why Daily Fantasy Sports hasn’t been legalized in every state.
The popularity of online gaming culture has been accelerated by nationwide access to the internet, and the widespread availability of Smartphones, Cloud Technology, and Mobile Gaming. With all of that, it t is hard to comprehend that DFS is still in its relative infancy. The diverse set of state laws make it challenging for new players to enjoy DFS responsibly from state to state.
With the improvements seen in the underlying technologies, in states where it is legal, DFS players can actively participate in online gaming safely. To reach this ease of access and play legally, the technology used by DFS operators includes geolocation to help verify a user in an allowed jurisdiction.
Traditional fantasy sports leagues such as a Fantasy Football league among friends or work colleagues were the impetus behind Daily Fantasy Sports. In traditional fantasy sports leagues that usually run in parallel to the entire season, participants are given a salary cap to create a winning team. They earn points based on their picks and with the best-performing players in the real world.
Following the same concept, Daily Fantasy Sports is based on a single day’s play or sometimes over a single game week. Cash payouts are made to the winning participants. The games can be decided in larger pooled games, 50/50 cash game competitions, or head-to-head tournaments.
In the United States, football (college and NFL), soccer, NASCAR, Major League Baseball, and professional basketball are some of the most popular DFS categories, but DFS gaming is available for all popular sports.
DFS takes the passion of sports fans to the next level. Sports fans follow the progress of their chosen sport in great detail and are extremely passionate about the success of their team. Daily Fantasy Sports gives fans the opportunity to gain financially by matching their knowledge about the sport against real-world game outcomes.
Skill and preparation by the DFS gamers are key to their success in playing. This level of control excites the gamer as it empowers the player to have a better chance of winning based on their knowledge and capabilities. While DFS is classified as a skills-based game, the uncertainty of competitive outcomes in the real world creates a sense of challenge and suspense that draws the gamers in and keeps them coming back for more.
Except for minor exceptions at places such as Las Vegas, up until 2018, all forms of online betting were illegal in the United States, Understanding state-by-state restrictions on DFS can be confusing because they depend on where you want to play.
Today the responsibility is with the legislators of each state since federal legislation prohibiting it has been rescinded.
The majority of states now allow gaming operators to offer some form of Daily Fantasy Sports driven by shifting attitudes toward internet gaming in general. The states of Idaho, Montana, Nevada, Hawaii, and Washington still classified DFS as illegal.
More states are moving towards a permissive attitude towards Daily Fantasy Sports and new legislation is being introduced all the time that promises to expand the reach of these games.
Until recently, betting on sports has been illegal. Because of the perception that DFS was similar to sports betting, it was difficult for the states to greenlight DFS.
Overturning of the Professional and Amateur Sports Protection Act (PASPA) in 2019 removed the federal ban on online sports betting, and paved the way for Congress to step back in. The individual states were left to set their own rulings on the legal status of sports betting so today, the legality of Daily Fantasy Sport by state varies throughout the United States.
The initial impact of the repeal of PASPA was the legalization of sports betting. Subsequently, the repeal had a greater impact as it paved the way for many forms of online betting including sports betting, casino gaming, poker, and Daily Fantasy Sports.
The designation of “skill vs luck” allows states to create their own rulings on DFS. This has led to the confusing picture today, with different legal statuses dependent on which state you are located in. With the PASPA repeal, some states have successfully argued that Daily Fantasy Sports is a game of skill, not a game of chance like roulette.
Most states have legalized playing Fantasy Sports online so it’s simpler to list where it is not legal these days. Due to the strict gambling laws of Hawaii, Idaho, Montana, Nevada, and Washington, most Daily Fantasy services block users of these states. Louisiana is a mixed bag since legality varies parish by parish, where each parish decides either to allow or prevent DFS in their region.
DraftKings and Fandual are the biggest operators in the Daily Fantasy Sports industry. The prominence of these companies is obvious to anyone who watches any of the big sports on TV, as they advertise their offerings during TV sports events. Fanduel is a very popular choice as it has the highest number of competitions to choose from, and the largest user base. DraftKing’s diverse features not found anywhere else are loved by sports fans making it another fan favorite.
Since the 2019 PAPSA decision, several smaller operators have become popular, including:
StarsDraft: its huge number of stats available to users has made it very popular as players can craft a team based purely on past performance statistics.
Monkey Knife Fight: has gained popularity as it aims to simplify DFS, making access all the faster. With their tagline “Daily Fantasy Sports for the Rest of Us”, they aim to entice the hobbyist user that finds comfort in the ease of play on the DFS platform.
Yahoo DFS: In 1999 Yahoo decided to make Fantasy Sports easy and, most importantly, free. Yahoo continues to roll out new features, balancing the game and focusing on transparency. As a result, the platform still has many players.
ThriveFantasy: partnered with the Jacksonville Jaguars and the Los Angeles Chargers, the DFS platform is focused on casual sports and esports fan.
FantasyDraft: does DFS for every major sport and is unique in offering cashback and referral rewards to the DFS mix.
Due to the complexity of state-by-state law, geolocation is hugely important for the Daily Fantasy Sports companies to stay legally compliant. These companies are required to ensure gamers’ computers and mobile devices are located within places allowed by local and federal regulations.
Tech-savvy users can try to spoof their location with a VPN or proxy bypass, and geolocation technology has the critical job of identifying a user’s location and flagging known bypass proxies or VPNs. This critical technology is provided by geolocation service providers through cloud-based location API platforms.
Locance offers a comprehensive, real-time cloud-based multi-source geolocation service to enable geolocation validation for Mobile Gaming Operators. Our secure, enterprise-grade API platform is used by operators as part of their regulatory compliance strategy.
Learn how Locance helps with Internet Gaming Compliance and grab our Mobile Gaming Product Brief.
Find out how our customers get compliant with geolocation regulations. Read our Mobile Gaming White Paper.
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