Monday, September 25, 2023
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Tennesee A.G. Throws a Flag on Daily Fantasy

NASHVILLE (CN) - Tennessee Attorney General Herbert Slatery III says that fantasy sports contests constitute illegal gambling under state law.

Tuesday's legal opinion states that gambling in general is illegal in Tennessee. State law defines gambling as "risking anything of value for a profit whose return is to any degree contingent on chance, or any games of chance associated with casinos, including, but not limited to, slot machines, roulette wheels and the like."

Slatery said the Tennessee General Assembly intended for a broad definition of gambling.

The Legislature approved the publication of "sentencing commission comments," which say: "The commission intends to include any scheme by which value is risked upon a chance for greater value as a 'gambling' offense. The definition of 'gambling' includes lotteries, chain or pyramid clubs, numbers, pinball, poker or any as yet unnamed scheme where value is risked for profit."

The Volunteer State's definition of gambling includes fantasy sports contests, according to the Tennessee attorney general.

"Fantasy sports contests fall within the broad definition of 'gambling' under Tennessee [law]. The participants pay an entry fee in order to win a prize. A portion of the fees comprise the pot of funds that are paid out to the winning participants. By proffering these entry fees, participants agree to risk something of value for a profit - a portion of the pot. Hence, the only remaining consideration is whether a participant's ability to win a fantasy sports contest is to 'any degree contingent on chance,'" Slatery wrote in the 3-page opinion. "While participants may use skill to select players for their teams, winning a fantasy sports contest is contingent to some degree on chance."

Without legislation specifically exempting fantasy sports contests, they are illegal under Tennessee's definition of gambling, Slatery said.

Texas Attorney General Ken Paxton took the same stance in January, following in the footsteps of New York and Illinois. The Empire State shut down sites like DraftKings and FanDuel last month.

Rhode Island Attorney General Peter Kilmartin called for regulation of daily fantasy sports in February.

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