Are daily fantasy sports gambling?

Abstract

Millions of people play daily fantasy sports in the hopes of winning money. The two largest daily fantasy sports companies, FanDuel® and DraftKings® process billions of dollars in entry fees every year. Recently, daily fantasy sports have landed in a tense political climate and some states have declared these activities as gambling because they are games of chance. If daily fantasy sports are games of chance, then every strategy should perform equally well. A study of FanDuel®’s NFL® contests provides statistically significant evidence that a participant’s fantasy score is not based upon chance. Another study spent $85 to enter 35 DraftKings® MLB Double Up contests with randomly selected teams. All 35 entries lost and the odds of this occurring, if these contests are chance, is 1 in 312,681,518. These odds are less likely than winning the Powerball lottery with a single ticket. Thus, daily fantasy sports are not games of chance, and the authors recommend that these contests should not be considered gambling.