Fantasy Basketball: Questions About Legality Remain

Fantasy Basketball in the US is legal under federal law but that doesn’t mean your individual state permits it.

With Fantasy Basketball getting into full swing over the next few days, questions about its legality will surely arise.

One need only look at the gambling industry to understand why federal vs. state law does matter.

Case in point: Federal law permits casino gambling in the US but in states such as Utah and Hawaii all forms of gambling, including lotteries, are outlawed.

Likewise, the vast majority of us can purchase alcoholic beverages on Sundays but in states such as Arkansas and much of Mississippi the sale of alcohol on this day is strictly prohibited a la so-called "blue laws".

Fantasy games are prohibited in states such as Washington, Kansas and Arizona as pointed out by Marc Edelman of Forbes.com:

In these states (known as ‘any chance states’) most forms of play-for-cash fantasy basketball would violate the state gambling laws unless they fall under state-specific “social gaming” or “in-house gaming” exceptions.  In ’any chance states,’ it is not advisable to play in online play-for-cash fantasy basketball contests, even if federal law may seem more favorable.

Edelman also notes that certain unique formats of fantasy basketball are more risky under both federal and state law. 

Even though traditional forms of fantasy basketball are very likely legal in most states, any format of fantasy basketball that strays from the traditional skill-to-chance ratio present greater risk.  Although daily fantasy sports websites gaining mainstream popularity, no court decisions have yet evaluated daily fantasy sports on its merits.  In addition, milestone predictions websites such as Scorestreak have never been evaluated under the Unlawful Internet Gambling Enforcement Act.  While both types of contests might very well be found legal, participants should exercise caution when entering contests of this nature, especially in those states that are more hostile to online gaming.

- Tyrone Black, Gambling911.com