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“INTERACTIVE FANTASY SPORT” (IFS) IS NOT “GAMBLING;” THE STATUTES AUTHORIZING AND REGULATING IFS ARE NOT, THEREFORE, UNCONSTITUTIONAL (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a comprehensive three-judge dissent, determined the 2016 statutes authorizing and regulating “interactive fantasy sport” (IFS) do not violate the New York Constitution’s prohibition of “gambling:”

… IFS contests are not prohibited gambling activities because contestants use significant skill to select their rosters, creating fantasy teams, and therefore have influence over the outcome of the fantasy contests between IFS participants. … [T]he historic prohibition on “gambling” in article I, § 9 does not encompass skill-based competitions in which participants who exercise substantial influence over the outcome of the contest are awarded predetermined fixed prizes by a neutral operator. * * *

… [T]he prohibition on “gambling” in article I, § 9 [of the NYS Constitution] encompasses either the staking of value on a game in which the element of chance predominates over the element of skill or the risking of value through bets or wagers on contests of skill where the pool of wagered value is awarded upon some future event outside the wagerer’s influence or control. However, games in which skill predominates over chance and skill-based competitions for predetermined prizes in which the participants have influence over the outcome do not constitute “gambling.” … .

From the dissent:

Since 1894, New York’s Constitution has prohibited “lotter[ies] . . . poolselling, bookmaking, or any other kind of gambling.” Everyone knows that sports betting is gambling. Betting on how many touchdowns a particular player will score is gambling. … Aggregating several bets involving different players into a point total that is pitted against point totals of other bettors does not transform gambling into something else. White v Cuomo, 2022 NY Slip Op 01954, Ct App 3-22-22

Practice Point: Statutes authorizing “interactive fantasy sport” IFS are not unconstitutional because such skill-based competitions do not constitute “gambling” in which the element of chance, as opposed to skill, predominates.

 

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