Tresa Baldas of the National Law Journal has a feature story on a complaint recently filed in the U.S. District Court for New Jersey asserting that ESPN.com, CBS.sportsline.com, and Sportingnews.com are engaging in illegal gambling by hosting pay-to-play fantasy leagues with lucrative prizes (also available on Law.com, 8/14/2006). The claim is being brought by Charles E. Humphrey, Jr., a Colorado attorney whose practice focuses on gambling law. He filed his suit in New Jersey because of that state's gambling loss recovery statute, which, interestingly enough, was originally passed in 1710 to protect English aristocrats from gambling away their inheritance and allows for a "private attorney general," or qui tam plaintiff, to recover half of gambling losses, with the other half going to the state. As Baldas notes, six other states, and the District of Columbia, have similar laws allowing a third party to recover gambling losses-Georgia, Kentucky, Illinois, Massachusetts, Ohio and South Carolina.
Humphrey contends that fantasy players can often lose because of circumstances beyond their control, like plain bad luck. Specifically, he said that if a baseball pitcher throws out his arm, or a football player twists an ankle, or a coach pulls out a star player to give him a break, those are all circumstances beyond the player's and bettor's control and thus consistent with a game of chance.
Humphrey's lawsuit is apparently causing great consternation among fantasy sports operators, and has elicited response from their lawyers that fantasy sports are about skill:
The lawsuit has raised some commotion in the fantasy sports industry, which has invited a team of attorneys to discuss the potential impact of the suit at the 14th Fantasy Sports Trade Conference in Las Vegas on Aug. 30.Baldas also interviews Attorney Rudolph Telscher and me:
"People of course are nervous about [the lawsuit] but the general feeling in the industry is that fantasy sports are not gambling," said Glenn Colton of the New York office of Palo Alto, Calif.'s Wilson Sonsini Goodrich & Rosati, who will speak at the conference. Colton, who also represents the Fantasy Sports Trade Association, doesn't believe Humphrey's suit will succeed.
"I think that the premise that [a fantasy sport] is more chance than skill is simply wrong," Colton said. "There are very large number of ways in which someone can skillfully and intellectually predict how a player is going to perform." For example, Colton said, a fantasy football player can study offensive coordinators' techniques, evaluate who gets the ball more often-wide receivers or running backs-or study a quarterback's performance.
Michael McCann, who teaches sports law at Mississippi College School of Law, does not think Humphrey's suit will prevail.We'll keep you posted on Humphrey v. Viacom Inc., No. 2:33-av-00001 (D.N.J.). For other coverage of fantasy sports on this blog, please click here.
"Fantasy sports just don't strike people as immoral. Even if his argument is technically correct, it lacks the moral weight that is so crucial in many other litigations," McCann said. He added that the name of the game itself-fantasy-"attempts to suggest that it's not real, that there's an innocence to it."
Attorney Rudy Telscher of Harness, Dickey & Pierce in St. Louis recently won a case on behalf of a baseball fantasy league operator suing over the rights to use player statistics.
Major League Baseball argued that fantasy leagues needed a license to use the information. But on Aug. 8, a federal judge ruled that fantasy baseball operators do not need licenses to operate such leagues. C.B.C. Distribution and Marketing v. Major League Baseball Advanced Media, No. 4:05-CV-00252 (E.D. Mo.).
Telscher said that the ruling was a big win for fantasy operators, which would have had to shut down had the judge ruled otherwise, and for fantasy players, who may have had to start paying fees for player statistics. "I think a loss would have definitely crippled [the fantasy industry]," he said.
0 comments:
Post a Comment