In recent years, the question of whether fantasy sports are a form of online gambling has been raised. To answer this question, it is important to understand the difference between luck and skill in fantasy sports. In the United States, fantasy sports (including DFS) are generally considered to be a game of skill and not a game of chance. This is because success in playing fantasy and real sports is largely based on skill rather than luck.
A team of MIT researchers conducted an investigation into the roles of skill and chance in fantasy sports. They compared fantasy sports to other activities such as coin throwing, which rely entirely on chance, and cyclocross racing, which rely almost entirely on skill. The results showed that fantasy football in the all-season version has 20% skill and 80% luck, placing it in the stock exchange stadium. Other fantasy sports such as baseball, basketball and hockey also appear to be games of skill considerably more than activities based on pure chance.
The paper's argument was that daily fantasy sports align quite well with professional sports, since daily fantasy football has approximately 55% skill and 45% luck (and therefore should not be considered a game). This suggests that most less skilled fantasy players would have been eliminated from this data set. For a company like FanDuel, it is crucial that fantasy sports games can be classified as skill games. Since fantasy coaches are likely to lean toward leagues where all coaches have a similar skill level, this would tilt the result toward the luck factor.
Overall, it can be concluded that fantasy sports are largely based on skill rather than luck. This means that in most states in the US, fantasy sports are not legally considered to be games of chance. Therefore, they should not be classified as a form of online gambling.
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