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Legal News: The Legality of Fantasy Sports Betting

An exception within The Unlawful Internet Gaming Enforcement Act of 2006 has helped create the booming industry of fantasy sports betting.

After the crackdown on internet gambling shut down many online poker websites, fantasy sports betting websites have thrived. Their success is a result of a special exception in The Unlawful Internet Gaming Enforcement Act of 2006, which provided an exception that fantasy sports betting is legal if it meets three exceptions:

(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.

(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

(III) No winning outcome is based-

(aa) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or

(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.

However, this exception was recently questioned by New York Times articles that pointed to the addictive nature of fantasy sports betting, industry protocol involving fantasy sports company employees' use of confidential data, and how this data is protected.

For additional articles, legal news, and consumer protection advice, please visit the Newsletter section of our website: /Newsletters/

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