July 13, 2016
Within the last week, attorneys general in West Virginia and Delaware made headlines for actions they have taken concerning fantasy sports. West Virginia’s Attorney General released an opinion which concluded that properly structured fantasy sports contests do not violate State law. The opinion was issued in response to a request from a State senator following the defeat of fantasy sports legislation in the State’ House of Delegates.
Meanwhile, Delaware’s Attorney General (the “AG”) sent cease-and-desist letters to the largest fantasy sports operators in the space: DraftKings, FanDuel and Yahoo. The letters notified the companies that their respective activities were not permitted in Delaware without future passage of authorizing legislation.
What precipitated the AG’s decision to order the end of fantasy sports contests in Delaware?
Delaware’s Department of Justice (the “DOJ”) had previously notified regulators in the spring that it considered fantasy sports contests to be illegal under Delaware law. The DOJ had held off on taking formal action, though, because a change to the Delaware law was expected to be proposed in the recent session. However, now that the State’s legislative session has expired with no changes to the gambling laws, the AG decided to send formal cease and desist letters advising the companies to add Delaware to their lists of states in which players are not legally permitted to win monetary prizes.
Keeping Your Fantasy Sports Venture Compliant
Fantasy sports contests and the laws and regulations that govern them, continue to grow and evolve. The conflicting conclusions of the attorneys general in Delaware and West Virginia regarding the legality of fantasy sports contests should serve as a reminder to those operating in the fantasy sports space that the legal landscape of this industry is far from settled. Against this backdrop, it remains imperative to engage competent legal counsel to become/remain compliant with applicable law when setting up or operating fantasy sports contests.
If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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