The New York Daily Fantasy Sports Case - Part XII

Back to the Future

In our previous post, we made the argument that the story of fantasy sports is akin to a ‘boiling frog,’  incremental changes happening over a long period of time, preventing the truth from surfacing. We then highlighted how the frog started boiling in the first place, so to speak. So, what is the first chapter in this story?

It all started with Strat-O-Matic, a sports simulation game you play with cards and dice. That game ultimately evolved into fantasy sports according to Marc Edelman:

With both traditional ‘table games’ and ‘computer simulation games’ failing to provide sports fans with a way to predict players’ future performances, some highly educated sports fans began to experiment with ways of creating sports simulation games that incorporated future events.” (emphases added)

The title Marc Edelman chose for that section was: A New Game is Created. The correct title should have been A New Claim is Created. This was precisely when the line was crossed. This was the moment when a game turned into a claim. This was exactly when gaming became gambling. The two are not equivalent (PDF). 

The narrative that fantasy sports is a game took hold despite being incorrect. Ultimately, that is why the Court of Appeals will hear oral arguments (watch live) in White v. Cuomo in a few days, on October 5.

October 5 … Remember that we told you why it would be the daily fantasy sports equivalent of November 12, which is a day of cosmic significance, or alternatively, an amazing coincidence in the movie Back To The Future? Now we have come back full circle. Watch:

When the old Biff sneaks the sports almanac into the time machine and shares it with his younger self in 1955, the young Biff gains an enormous edge. The almanac “tells the results of every major sports event.” The best use of that information, for Biff, is to make sports bets that are guaranteed to make him a lot of money. The result? Hill Valley turns into hell:

There is now an alternate 1985, alternate for Marty, Doc and Einstein (Doc’s dog in the movie), but reality for everyone else, a reality which is good if you are Biff, but not good if you are a Hill Valley resident. The only way to reverse that alternate reality is to go back in time.  

Back to the Future is an amazing movie franchise. Amazingly, it also teaches us a lot about sports gambling: 

  1. Sports betting and daily fantasy sports are claims on future contingent events

In our amicus brief (PDF), we drafted a footnote, which we felt was rather important. We said:

Real-world information may be relevant in certain games, e.g. trivia or charades. Critically, however, the skill is in knowing what happened in the past, not predicting the future. Knowing who won the Super Bowl LV is sports trivia skill, risking money on Super Bowl LVI is a sports bet.

Imagine a sports trivia game where you score points based on your knowledge and memory. If you are the ‘almanac’ type that has a tendency to retain information better than others, you can do well in those types of games. The jury is out on whether or not memory is a genetic skill, but either way, Jeopardy champions are known for their memory and recall abilities. 

But, risking money on future sports events is not a trivia game. It’s a gambling claim.  

Imagine, for a moment, that such an almanac included a full box score for each sports game and you had the almanac. Do you think that would help you in so-called “fantasy sports games”? If the answer is yes, then you agree with us that there is only one way to rule on White v. Cuomo.

  1. Daily fantasy sports is a matter of law, not public policy

The scriptwriters in Back to the Future may have been too optimistic about a legislature’s stance on gambling. In Hill Valley, it appears that the gambling bill goes through by a margin of exactly one vote.  

New York had a much different experience. The DFS bill cleared the assembly 91-22. 

In the Senate, it was 45-17. It was never close, despite Andy Goodell successfully making the case that the game-of-skill argument leads nowhere in front of the entire Legislature. Now, the Court of Appeals will have to weigh in on, among other things, whether the Legislature acted rationally. 

Is allowing sports gambling good public policy? You may feel that it is a harmless entertainment choice. You can say that people can spend their money however they want. You may like the idea of having the names of gambling companies on sports jerseys, even though the UK, after 16 years of experimenting with this very idea, is going in the exact opposite direction

We believe that one’s personal liberty ends where another starts. We are not fans of casino gambling, but those are gambling games. Whether or not to offer those games to the public is a state decision. Sports gambling is a different animal altogether as it creates perverse incentives for anyone involved. It degrades the fan experience and it makes sports, an integral part of the fabric of society, transactional in a way that allows only a few to win at the expense of everybody else. 

All that said, you can disagree with us on public policy. However, White v. Cuomo is not about public policy, it’s about the laws and the New York Constitution. If the State of New York wants daily fantasy sports to be legal, it must go through the proper legislative process, which cannot be circumvented. The Constitution cannot be bypassed just because the industry wants it to. 

In Back to the Future, the Pleasure Paradise, Biff Tannen’s casino, was located in the same spot where the Hill Valley courthouse once was. Gambling, it seems like, has a habit of clashing with the courts. 

White v. Cuomo is a major speed bump lying in the way of daily fantasy sports and sports gambling as a whole, in New York. The New Sports Economy is a friend of the court and a public policy advocate that wants to help set the record straight. Will the New York Court of Appeals agree with us? We shall find out very soon.

Start at the beginning with Part I

White v. Cuomo - New York State Court of Appeals - APL-2020-00027

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