Ever thought that $100 you throw down each fall for your fantasy football league might be some form of illegal gambling? A friend of mine asked me if he could get in trouble after his wife told him he couldn't bet money on fantasy football because it is illegal. Hoping to save my buddy from the clutches of a season of watching the Browns play the Dolphins (or some other irrelevant contest) without the added fun of smack talking your opponent if Reggie Bush makes a big play, I looked into the question.
Minnesota makes it illegal to make any kind of "bet" which is "a bargain whereby the parties mutually agree to a gain or loss by one to the other of specified money, property or benefit dependent upon chance although the chance is accompanied by some element of skill." Minn. Stat. § 609.75, Subd. 2. Fantasy football is essentially the combination of a bit of skill - organizing a team of big name players - with the chance of their success or failure as compared to the success or failure of the other teams' players establishing winners and losers of the league. This is looking bad right? Not too fast.
First, the Minnesota Attorney General opinions and court cases establish that contests for "purses, prizes or premiums to the actual contestants in any bona fide contest for the determination of skill, speed, strength, endurance, or quality or to the bona fide owners of animals or other property entered in such a contest" that are not games of chance are similarly not games that violate the gambling statute, under subd. 3(3). Op.Atty.Gen., 510-B, Nov. 25, 1949 (bowling contest for prizes not a lottery because based on bowler's skill); Op.Atty.Gen., 510-D, June 1, 1949 (game where player inserts coins and answers questions in limited time is contest of knowledge and education of the player, not chance); Op.Atty.Gen., 510-D, July 30, 1948 (radio quiz program); However, in a common office game where you pick weekly winners of each of the football contest, the Attorney General is of the opinion you are operating an illegal lottery. Op.Atty.Gen., 510-E-3, Sept. 24, 1947.
So long as your fantasy football league involves a contest of skill - who picks the best players to win that week - you are probably closer to the bowling contests and horse races, which are legal, than the random team picking which is basically a game of chance dependent more on the unpredictable outcome of the aggregated set of contests than the individual picker's skill at selecting the winners.
Second, there is an exception to the definition of a "bet" for "a private social bet not part of or incidental to organized, commercialized, or systematic gambling." So what does that mean? A social bet is one where only the two (or more) participants in the bet have any share of the winnings (i.e. there is no "house rake" or similar transaction where a commercial entity profits from the betting) and the bet does not otherwise violate the gambling laws by being part of, for example, a commercial gambling operation.
Fantasy football is definitely organized - there are usually a lot of rules about who can play, how you play, and the structure of the fantasy game itself. However, the word "organized" in the gambling law likely refers back to a commercial or mafia "back room" type gambling operation, not simply being orderly in the management of your social bet. Because a fantasy football league privately between friends is likely still a social bet, despite its rules and organization, it is likely exempt from the illegal gambling laws. You might still get in trouble if you were a player in the game (don't be a Pete Rose), or if your fantasy league became a "sports book operation" because it involved more than 5 bets which aggregate to more than $2,500 and was "organized, commercialized, or systematic gambling."
Another quagmire is if you have out-of-state friends that play in your league. The interstate nature of the betting can lead to violating some federal gambling laws which are beyond the scope of this post. Another problem is if a friend lives in a state that makes fantasy sports betting illegal. For example, both Florida and Louisiana's attorneys general have opined that fantasy sports were illegal forms of gambling under their respective states' laws. Fla. Att’y Gen. Op. No. 91-3 (Jan. 8, 1991), available at 1991 WL 528146; La. Att’y Gen. Op. No. 91-14 (1990‒1991), available at 1991 WL 575105.
Those caveats aside, if you and your 11 buddies each throw in $100, and there is only the $1,200 in the pot, and no one other than the 12 team owners can win the money, you are probably making a social bet and can tell your wife (or husband) that Maurice Jones-Drew is going to lead you to the promised land of fantasy victory, and the long arm of the law can't touch you.