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Legal Issues in Fantasy Sports

By David O. Klein and Neil E. Asnen
May 02, 2015

Fantasy sports once represented a seasonal hobby among friends and coworkers. However, it has now undeniably blossomed into a force in both the American culture and, more important, the U.S. economy. According to the Fantasy Sports Trade Association, some 42 million Americans now play some form of fantasy sports contest. Moreover, additional estimates indicate that fantasy sports represented a $4 billion to $5 billion industry in 2014. The number of unique users that visited just the two leading daily fantasy sports websites, FanDuel and DraftKings, increased by over 800% on mobile devices, and nearly 500% on the Internet from 2013 to 2014, according to Nielsen's “The Year in Sports Media Report 2014.”'

In addition to these staggering statistics is the fact that traditional media sources, including NBC, CBS, FOX and ESPN, air dedicated fantasy sports-related television shows incorporated into their regular sports programming, and that the FX network has aired the popular fantasy football sitcom The League since 2009. Likewise, professional sports organizations themselves, including the National Football League (NFL), the National Basketball Association (NBA), Major League Baseball (MLB) and the National Hockey League (NHL), have each, to varying degrees, negotiated and made deals with daily fantasy sports websites, including the NHL's recent exclusive deal with DraftKings.

While the professional sports leagues recognize the implicit benefits that fantasy sports generally, and daily fantasy sports contests particularly, provide by virtue of their ability to drive fan interest in their respective sports, perhaps no league has embraced daily fantasy sports recently quite like the NBA. In the fall of 2014, the NBA signed an exclusive deal with industry leader FanDuel and will become a direct investor in the site. Additionally, many individual NBA franchises also have signed partnership agreements with daily fantasy sites, seeing the arrangements as an opportunity to further engage their respective fan bases.

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