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Uber, Dominos, and the Shawshank Redemption: The Inevitable Legalization of Daily Fantasy Sports

November 1, 2016
By Brett Wessels

This paper, published in Gaming Law Review and Economics, examines the growing trend of daily fantasy sports, arguing why consumer demand will drive state lawmakers’ policy decisions towards legalization and liberalization.

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This paper, published in Gaming Law Review and Economics, examines the growing trend of daily fantasy sports, arguing why consumer demand will drive state lawmakers’ policy decisions towards legalization and liberalization.

State lawmakers and policymakers hold the power to drive national gambling and gaming policy, writes the paper’s author, Brent Wessels.

“Gambling falls within the purview of the states’ police power, which is reserved to the states impliedly by the U.S. Constitution and explicitly by the Tenth Amendment,” Wessels writes. According to the Supreme Court, gambling is a vice and the states should have the ability to suppress it. Even immediately following the Pete Rose scandal, Senate Bill 474 (which ultimately became the Professional and Amateur Sports Protection Act of 1992, or PASPA) experienced opposition from the Department of Justice on the grounds that regulating sports gambling among the states was too intrusive into states’ rights. The decision of each state to choose how to handle gambling is best exemplified by gambling mecca Nevada being neighbors with Utah, which is only one of two states without legalized gambling. This state-level discretion encourages experimentation as well.”

Consumer pressure will drive state lawmakers towards more freedom, Wessels writes.

“Sports is a business, and the business of sports is shifting due to technology and societal factors,” Wessels writes. “While the leagues will do anything to protect the sanctity of the game, the owners and commissioners realize that the landscape is shifting and that they need to be proactive. The resources of those supporting DFS is enough to keep applying a full court press of lobbying and advertisements across the United States. But pressure for a particular state is going to turn into digital suffocation when the perception changes from potential revenue to simply lost revenue. Social media, a 24-hour news cycle, and hundreds of millions of dollars going to a neighboring state have a way of creating a highly pressurized political environment in a hurry. Ironically, the same cultural craving for competition that draws fans to DFS will likely makes its legalization a slam dunk.”

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