Daily Fantasy Sports (DFS) Legal Loophole History
The Daily Fantasy Sports (DFS) industry emerged from a specific exemption in the **Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006**, which carved out protections for fantasy sports under the assumption they were season-long social games. Operators like FanDuel and DraftKings exploited th...
Summary
The Daily Fantasy Sports (DFS) industry emerged from a specific exemption in the **Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006**, which carved out protections for fantasy sports under the assumption they were season-long social games. Operators like FanDuel and DraftKings exploited this by compressing the timeline to 24 hours, creating a high-frequency betting product legally classified as a **Game of Skill** via the salary cap mechanic. The industry faced an existential crisis in 2015 following the **Ethan Haskell data scandal**, leading New York and other states to challenge the legality of DFS. The conflict was resolved through state-by-state legislative lobbying, which eventually positioned DFS operators to dominate the US market following the 2018 repeal of PASPA.
References & Further Reading
- 1. Unlawful Internet Gambling Enforcement Act of 2006 (31 USC 5361) View Source →
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