Teaming with gain: Are daily fantasy sports a form of gambling?

Fantasy sports games have been popular for many years and involves individuals assuming the role of a professional sports team manager (typically football) and assembling a virtual team of sportsmen to compete against other players within a private or public league. For decades, the game was played out across the whole season with the winners being those that had accumulated the most points (with the points gained being based on the real-life statistics of individual sportsmen using a predetermined scoring system).

However, fantasy sports have changed dramatically over the last few years. Although the game can still be played over a whole season, the playing of daily fantasy sports (DFS) has become increasing popular (particularly in countries such as the USA, Canada, and Australia) and can operate over much shorter time periods. In DFS, players can pay to play and this has led to the blurring of lines of whether the activity is a game or whether it is gambling. As Dr. Dylan Pickering and his colleagues noted in a 2016 issue of Current Addiction Reports:

“Daily fantasy sports (DFS) is the most recent and controversial of FS games…It is an accelerated version of FS conducted over much shorter time periods: generally a single game (per day) or weekly round of competition. Users pay entry fees ranging from US 25 cents to US $5000 per league, which is deposited into a prize pool typically paid out to the highest ranked users in the contest. A portion of the entry fees also goes to the operator as commission. Accordingly, DFS, as such, is most associated with wagering. Currently, the US DFS market is dominated by ‘FanDuel’ and ‘DraftKings’ (combined with about 95 % of the market)”.

According to figures in the same paper, in the USA, the fantasy sports (FS) market is currently estimated to be between $3 billion and $4 billion. In 2015, approximately 57 million Americans played FS. Research suggests that the prevalence rates are higher in North America than elsewhere with 19% of Canadian adults and 16% of American adults engaging in FS compared to 10% of British adults and 6% of Australian adults (Pickering et al., 2016). However, these figures relate to FS rather than DFS and many FS players do not pay money to participate in the game and simply play for fun. Some research by Dr. Joris Drayer and colleagues in a 2013 issue of the European Sport Management Quarterly also suggests that those who engage in playing DFS do not typically engage in other forms of gambling. Furthermore, in a 2011 issue of Journal of Sport Management, Dr. Brendan Dwyer and Dr. Yongjae Kim reported that compared to more traditional forms of gambling, the elements of fun, excitement, competition play a bigger role than winning money in the playing of DFS games.

A study carried out by Dr. Ryan Martin and Dr. Sarah Nelson published in a 2014 issue of Addictive Behaviors found that college students who were FS users (free and fee-based) were five times more likely to incur gambling problems than non-FS users, and students who played FS for money had significantly higher rates of gambling problems than those who played in free leagues. A more recent 2016 study by Loredana Marchica and Dr. Jeff Derevensky in the International Journal of Mental Health and Addiction examined data from national surveys of collegiate athletes and reported a steady rise in FS participation among college students between 2004 and 2012. They reported that approximately half of the male and a quarter of the female college athletes who qualified as at-risk or problem gamblers also reported wagering on FS.

There has been much debate (particularly by US legislators) as to whether playing DFS for money is classed as a legitimate form of gambling. If gambling is defined as “an agreement between two or more parties to deliberately stake something of value (typically money) with intent to profit on the outcome of an event that is determined wholly, or partially by chance” (by Pickering and colleagues), then DFS could well be a form of gambling as they argue:

“DFS can be construed as representing a form of gambling: (a) DFS includes an agreement between an individual and others, (b) money is staked on the relative performances of athletes across a certain number of sporting events with the outcome determined by both chance and skill, and (c) chance is involved given that multiple unknown factors can influence outcomes. In this regard, similarities are found in horse and sports wagering where some skill in selecting horse/sports outcomes is present, but unpredictable variables influence results (i.e., chance)…Literature from the legal field asserts that gambling must contain three elements: (a) consideration (staking something of value in order to participate), (b) chance (luck is a substantial factor in determining results), and (c) prizes (cash, merchandise, services, or points) are redeemable…While the first and third elements are clearly present in DFS, the second element, chance, is the source of current disagreement”.

The US legislation on gambling rests on whether an activity is more skill than chance determined. If DFS is predominantly a game of skill it is not deemed to be a form of gambling. The DFS operators claim that DFS games are not gambling because of the “substantial” amount of skill involved in the selection and management of FS teams. But is this any different for the professional gambler who bets on horse racing given the many factors that the person gambling has to take into account (the form of the horse, the skill of the jockey, the weather conditions, the state of the track, the number of other horses involved in the race, etc.). Similarly, poker and blackjack are both games that players can win big if they are skilful. Personally, I believe that playing DFS games for money is definitely a form of gambling, and even if it isn’t legally classed as a form of gambling, the games contain structural elements (including high event frequencies, low entry fee per game, lots of games, etc.) that can facilitate excessive use and expose vulnerable players to harm. DFS operators also allow team line-ups from a previous sporting event to populate other events which increases the speed of play, another factor that can facilitate habitual use. Furthermore, as Dr. Samantha Thomas and her colleagues argued in a recent 2015 report, the enhanced participatory role that fantasy games introduce could facilitate the illusion of control as they perform actions, making bettors overestimate the importance of skills and knowledge for the outcome of the competitions.

Dr. Mark Griffiths, Professor of Behavioural Addiction, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Drayer, J., Dwyer, B., & Shapiro, S. L. (2013). Examining the impact of league entry fees on online fantasy sport participation and league consumption. European Sport Management Quarterly, 13(3), 339-335.

Dwyer, B., & Kim, Y. (2011). For love or money: Developing and validating a motivational scale for fantasy football participation. Journal of Sport Management, 25(1), 70-83.

Marchica, L., & Derevensky, J. (2016). Fantasy sports: A growing concern among college student-athletes. International Journal of Mental Health and Addiction, 1-15. Epub ahead of print.

Martin, R. J., & Nelson, S. (2014). Fantasy sports, real money: Exploration of the relationship between fantasy sports participation and gambling-related problems. Addictive Behaviors, 39(10), 1377-138.

Pickering, D., Blaszczynski, A., Hartmann, M., & Keen, B. (2016). Fantasy sports: Skill, gambling, or are these irrelevant issues? Current Addiction Reports, 3(3), 307-313.

Thomas, S., Bestman, A., Pitt, H., Deans, E., Randle, M., Stoneham, M., & Daube, M. (2015). The marketing of wagering on social media: An analysis of promotional content on YouTube, Twitter and Facebook. Victoria, Australia: Victorian Responsible Gambling Foundation.