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March 18, 1998

Fantasy Baseball and the Long Arm of the Law

Could you be in an illegal roto league?

by John R. Mayne

It's the cops again. This time, they've got a warrant. You've flushed the heroin, buried the bodies, and, hey, she said she was 21 and how could you have known her real age? You are under arrest anyway, charged with gambling and bookmaking. You are a fantasy leaguer.

Now that you've hired me as your lawyer, I'm going to explain the law to you. (I don't usually do criminal defense work, but my ethical standards require me to take the large retainer you've offered.)

Before I go further, a little background. There is very little (probably no) binding case law on betting on fantasy leagues, and all of the following interpretations are my opinion. So if I misguess and you go to trial and lose, don't sue your poor lawyer. I've also deliberately simplified some of the analysis. I welcome correspondence on this from any interested person.

Before we get to the actual law, we should review how you got arrested in the first place. The cops, surprisingly enough, are too busy solving murders and giving David Letterman and yours truly traffic tickets to go out and arrest you for being in a fantasy league. However, you were turned in by one of your close personal friends. Perhaps your charming ex-girlfriend had a beef with you, or maybe it was that guy who dropped out last year after you perpetrated The Great Radke Ripoff at the end of 1996. I don't know who ratted you out, but the police will typically, reluctantly investigate any criminal complaint that is aggressively pursued. And now they've got you.

There are three main portions of any state law of which you may run afoul. The first is gambling. Betting is not generally illegal -- it is always legal to bet on who won the 1980 AL batting title -- but certain restrictions on some types of betting are present in every state, even Nevada. Whatever is illegal is usually called "gambling." The second portion is sports betting. There are very fine points of law on whether a sports-related bet might be legal depending on the specific wording of the statute and the nature of the bet, but in general betting on future sporting events or sub-events (like whether Chicken Chow Mayne will out-homer Flinn-Flam) is illegal. The third is bookmaking or gambling promotion, which will normally apply to the commissioner or treasurer, but can apply to all members if your league is considered a "gambling enterprise" or the like.

For your case, we have to figure out what state we are in. It makes a big difference, because each state has its own gambling statute. If we're in Nevada, we probably don't have a problem. I'm going to look primarily at Texas law, because I think it's representative and also not overly complicated. Since I'm from California, I'll also give a short analysis of the complicated California law.

Texas' gambling laws are written in very plain language and are not particularly difficult to interpret. In Texas, you can have a poker game at your house, and you can play golf for money, and I'll bet on that being right. But despite their simplicity, the application to fantasy is a little complicated.

First the easy part: your league's commissioner is probably guilty in Texas of gambling promotion for selling chances based on player performance. If there is direct payment of fees by losers to winners, he would probably avoid that.

However the whole "selling chances" problem may affect all league members. Who, exactly, is "selling" the chance? The purchaser of the chance is not covered, but the seller is. Who is selling? Arguably, each member of the league. Uh-oh.

Additionally, you are all probably guilty of gambling promotion for "a scheme between three or more persons to receive, record, or forward a bet or offer to bet." You might avoid this by not talking to anyone else about receipt or recordation of league money. Note that as much as this sounds like advice to cover up a crime, it isn't; I'd never advise a anyone to do that. But in this case the recordation or planning of same is the crime; I am advising you not to commit that crime.

Next the hard part: Are you guilty of gambling? The answer depends on several factors. If you held your draft or your payoff party in a public place (like a restaurant), you're guilty. If you have a keeper league where an expansion team came in at some point, you're guilty. If you have a rotation draft, you're guilty. Auction draft? That's OK. If there haven't been any expansion teams or you are in a year-to-year league, you have a defense if you didn't run afoul of any of the above. "Of course!" you say. "How obvious. But for the benefit of Gary Huckabay, could you explain the reasoning behind that?"

If everyone's got an equal shot and you stay away from public places, you can avoid gambling (but not gambling promotion) charges with Texas' affirmative defense. Rotation drafts give an advantage to some player(s), while auctions don't. Expansion teams don't have the same chance as existing teams.

So, it's time to go to the plea bargaining table. You won't spend too much time in jail.

Drifting over to California, the law is somewhat more arcanely worded. My strong belief is that you do not run afoul of the betting-type gambling law because fantasy leagues are primarily a game of skill (which is probably the test in California). There is non-binding case law which states that betting on bridge is not illegal because it is primarily skill, and that's a reasonable parallel.

But again, the bookmaking and sports-bet portion of the exercise is more problematic. Without going into a protracted analysis, you may be able to avoid breaking the law if you don't write it down when you receive the money.

My conclusion? Fantasy baseball, played for money, is illegal for at least some of the participants in at least some states. So, try not to get arrested, but if the cops come to arrest you, remain silent and get a lawyer. Don't try to explain that the complainant is just bitter because of the "Radke rip-off."

See you at trial.

John R. Mayne is an attorney from Carpinteria CA, who primarily practices in the areas of employment law, libel law, and victim rights. As far as fantasy leagues, he also knows the Fifth Amendment to the Constitution. You can e-mail him at redouble@lightspeed.net.

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2006-04-04 - The Kings' Tales
1998-03-18 - Fantasy Baseball and the Long Arm of the Law