Residents of Washington state have to sit on the sidelines when they see the ubiquitous ads on television for DraftKings and FanDuel, two online purveyors of fantasy sports that allow participants to select teams of professional football, baseball and basketball athletes with the promise of winning money based on how well their selections perform.
Both companies are required by Washington state law, along with laws in Arizona, Louisiana, Montana and Iowa, to block access to residents in those states. Federal law outlaws online gambling but has exempted fantasy play under the claim that it’s a game of skill rather than chance, likening it to the familiar office pools during March Madness.
But Washington state lawmakers may revive legislation that would open play on DraftKings and FanDuel to state residents. The state Senate Commerce and Labor Committee is scheduled to meet Friday to take testimony from representatives of the fantasy sports companies and others on whether to relax one of the nation’s strictest gambling laws.
Even though state residents are technically blocked from use of the websites, some players get into the game illegally by using third-party websites or out-of-state credit cards.
“Thousands of Washington citizens break the law every day when they play fantasy sports games for prize money,” said Sen. Mike Baumgartner, R-Spokane, in a story last week in the Spokane Spokesman-Review. “When so many people ignore a law, we ought to recognize there’s a problem with it.”
But the real problem may not be with the state law but with the federal law, written nine years ago to address those office pools and the informal fantasy sports drafts among friends, not the multi-billion daily fantasy industry that has exploded since then.
The states of New York and Nevada — which has some experience with gambling — have recently told FanDuel and DraftKings to stop taking bets from their residents, citing concerns that the daily fantasy play is a game of chance and not a game of skill. And more evidence is mounting to support that suspicion. A study published in July by Sports Business Journal found that about 85 percent of players had lost more money than they’ve won. About 77 percent of the online winnings were collected by 1.3 percent of its players, many of whom used computer algorithms and meticulous research to win, strategies not likely to be used or even available to the average player, who instead relies at best on educated guesses and more likely the element of chance.
The concern, of course, with the daily fantasy sites, like online poker before them, is the risk that those who participate are at an increased risk to develop a gambling problem, cheered on by the promise of big prizes and the false perception that anyone can win.
Those concerns led lawmakers to put bills in the state House and Senate on hold earlier this year. And Sen. Pam Roach, R-Auburn, has since narrowed the scope of her bill to allow only the small-pot pool play among friends. Unlike the daily online fantasy play where thousands of dollars can be wagered, Roach’s bill would allow leagues of up to 50 people, with a maximum investment of $50 per player in a season-long contest.
Lawmakers have only a short 60-day session set to start in January and other issues to take up. As more states question the legality of the daily fantasy sites, our lawmakers shouldn’t chance loosening our laws too far.
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