Fantasy Sports: A Game of Skill Over 50 million Americans participate in some form of fantasy sports, a contest of skill that allows them to have a deeper appreciation for the sports they follow and love. No less an authority than the NFL has said, “Fantasy football is a game of skill, and gambling is not.” 50 MILLION+ Whether a participant wins or loses depends entirely on his or her skill relative to the other participants in the fantasy contest. It’s not like games of chance, where no matter how skilled the player is, the game is designed to come down to luck – a spin of a wheel or the draw of a random card. But don’t just take our word for it, many others agree: MLB, NFL, NHL, NBA, and NASCAR all support the Daily Fantasy Sports Industry because they agree it is not gambling and enriches the fan experience. “[B]ecause of the legal definition of daily fantasy vs. what sports betting is…daily fantasy, as it's currently constructed, is clearly a game of skill." NBA Commissioner Adam Silver, October 21, 2015 “Fantasy football is considered a game of skill and has never been considered gambling by legislators in [Congress].” NFL Spokesman Brian McCarthy, June 2015 “You have to be an idiot to think playing daily fantasy sports games are like sports betting or poker. It’s not gambling, it’s not gambling, it’s not gambling…The only people who think it’s gambling, as opposed to skill, are people who haven’t played or people who have other political agendas.” Mark Cuban, January 8, 2016 Federal law acknowledges that fantasy sports contests determined by the relative skill of players are not gambling under the Unlawful Internet Gambling Enforcement Act of 2006. “I think that fantasy is an important source of fan engagement, it has been for a long time. We did thoroughly investigate the games that were available on [DraftKings]…I’m quite convinced it is a game of skill, as defined by the federal statute. And I'm comfortable with the idea that it's not gambling.” MLB Commissioner Rob Manfred, October 22, 2015 “Daily Fantasy Sports is strategic, and it can be unforgiving to the casual participant who chooses players based on emotion, media narratives and hometown favoritism. Often that participant is facing analytically inclined opponents who rely on game theory and probability to calculate their likelihood of winning from an assortment of variables: injuries, coaching tendencies, weather. Smart risk-taking and attentiveness are rewarded.” Sports Illustrated, February, 2015 Numerous independent academic studies of Daily Fantasy Sports conclude that they are contests of skill: “[W]inning a prize in any of the games that DraftKings offers strongly depends more on skill than on chance, and that chance is immaterial in the probability of winning.” 96.1% 82.8% Hockey There is “a persistently higher win rate of Top Performers relative to Average Performers over time… DFS is a game in which skill plays an important role.” - Daniel L. Rubinfeld, Professor of Law and Economics Emeritus at the University of California Berkley and Professor of Law at NYU Law School, analysis of DraftKings’ basketball, baseball, and football contests. Football Top Performers Baseball Average Performers Basketball University of Chicago Professor of Statistics and Econometrics Zvi Gilula who analyzed DrafKings user contest data for football, basketball, and baseball contests. 83.4% 81.9% Skilled players’ lineups dominated over randomly generated unskilled computer simulations 96.1% of the time in basketball contests, 82.8% in baseball contests, 83.4% in football contests, and 81.9% in hockey contests. - Gaming Laboratories International (GLI) skill study of DraftKings contests. Basketball contests Baseball contests Football contests Hockey contests 95% 73% 86% 68% Actual users beat computer-generated lineups 95% of the time in basketball contests, 73% in baseball, 86% of the time in football, and 68% of the time in hockey on FanDuel and users improve with practice. Users with more experience had significantly higher win rates over time. The consistency of the results of individual users as compared to the diversity of results over the population of users indicates that skill level is important in determining outcomes. - Anette Hosoi, Professor of Mathematics and Engineering at MIT analysis of FanDuel players’ actual results as compared to computer-generated lineups. McKinsey & Company issued a study of the first half of the 2015 baseball season titled, “For Daily Fantasy Sports Operators, The Curse of Too Much Skill.” It found that 91% of player profits were won by 1.3% of players.