The Athens Banner-Herald reported Monday that Georgia Attorney General Sam Olens said that his office is embarking upon an investigation to determine if daily fantasy sports violate state law. Unlike in New York, it does not sound like Olens is on a crusade to rid his state of the pastime, though only time will tell whether or not his office not only decides DFS is illegal, but also decides to do something about it.
Olens did not have much to say to the newspaper, replying to its questions only with, “The issue is pending in our office.”
According to the Georgia code, daily fantasy sports very well could be considered gambling. Section 16-12-22 of the code states that the “offense of commercial gambling” takes place when one (among other things) “Operates or participates in the earnings of a gambling place,” or, possibly more relevant to DFS, “Sells chances upon the partial or final result of or upon the margin of victory in any game or contest or upon the performance of any participant in any game or contest….”
For the purposes of the above, a “gambling place” is simply anywhere bets are received or held. And, perhaps most importantly, Section 16-12-20 of the code defines a “bet” as, “an agreement that, dependent upon chance even though accompanied by some skill, one stands to win or lose something of value.”
Of course, that brings us to the old “skill” versus “chance” argument. Is DFS “dependent upon chance” and just “accompanied by some skill,” or is it maybe “dependent upon skill” and “accompanied by some chance?”
As Georgia resident Brent Holloway, editor of DailyFantasyTalk.com, told the Banner-Herald, the Attorney General’s office “can make a case,” though “It depends on how aggressive his office wants to be.”
Daily fantasy sports are legal under federal law, as they have a carve-out in the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), but state law supersedes federal law in the case of gambling.
Neighboring South Carolina, which is as conservative as conservative gets, doesn’t sound overly concerned about DFS. J. Mark Powell, a spokesman for South Carolina Attorney General Alan Wilson, told the Banner-Herald that nobody has filed a complaint with his office about daily fantasy sports.
While legal, regulated gambling is currently limited to just the lottery in Georgia (and the Georgia Lottery did send a letter to DraftKings and FanDuel a couple months ago to tell them they may be violating state law), there have recently been hearings in the state legislature about the possibility of legalizing casino gambling. While the hearings were generally positive, daily fantasy sports has not been addressed, likely because it is internet-based. Should land-based gaming get the green light at some point, it would be surprising if daily fantasy sports would get shut down (then again, if its shut down, it would be sooner rather than later). At the same time, though, other states with established land-based gambling industries have been known to be protectionist and have moved to ban online gaming.