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Jim GallowayJim Galloway

Fantasy sports games = illegal gambling, says Sam Olens’ office

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Falcons cornerback Robert Alford recovers a fumble by Saints running back Travaris Cadet at the one yard line during the fourth quarter in a January home game. Curtis Compton / ccompton@ajc.com

Falcons cornerback Robert Alford recovers a fumble by Saints running back Travaris Cadet at the one yard line during the fourth quarter in a January home game. Curtis Compton / ccompton@ajc.com

Just before a Senate bill to regulate fantasy sports operations was to move, the Georgia Lottery Corp. obtained a legal opinion from the office of Attorney General Sam Olens that declared the potential competition to be illegal gambling.

We’re looking at a letter from Wright Banks Jr., deputy attorney general for the state of Georgia to Joseph Kim, top lawyer for the Georgia Lottery Corp.

The question Kim wanted answer is whether fantasy sports games are illegal under Georgia law. Specifically, are they games of chance or skill?

The answer is probably why Senate Bill 352, sponsored by Sen. Renee Unterman, R-Buford, has been dropped to the bottom of the Senate calendar on Crossover Day.

Unterman’s proposal would set standards for the private operation and payouts of fantasy sports game operations. And it would require companies that have players in Georgia to register, paying an initial $50,000 fee, with a $10,000 fee to re-up annually. The money would go toward state education programs, including the Hope scholarship.

But Attorney General Sam Olens’ office, in a letter dated last Friday, says that would be illegal: Fantasy sports constitute the kind of gambling that is forbidden state law.

Banks cited a 1934 case:

“[T]he court decided that whether a game was one of chance did not depend on whether a participant could become more proficient with practice, but on whether the same player could do the exact same thing and still lose – not because of his actions, but because of the action of the machine. In daily fantasy sports, a participant whose purported skill level has not changed from one game to the next is just as likely to win one tournament, then lose the next tournament due to the performance of players outside of the participant’s control.

In response to your first question, and based on the above discussion, daily fantasy sports would not be authorized under Georgia law unless the “actual contestant” exclusion raised in your second question is satisfied.

Your second question is whether daily fantasy sports fall under the “actual contestant” exclusion….That exclusion does not apply to daily fantasy sports. The purpose of the exclusion is to allow athletes competing in the sporting events to be rewarded for their efforts, not for people to receive compensation for betting on the outcome of those events or the performance of a particular athlete…

For the above reasons, it is my informal advice that daily fantasy sports are not authorized under Georgia law….

Here’s the reaction from Randy Mastro, counsel to DraftKings:

“We are disappointed that the Georgia Lottery Corporation is seeking to bar Georgia citizens from continuing to enjoy the fantasy sports they love.  There is no legal or other basis for depriving Georgians of this popular recreational activity.

DFS is a legitimate business activity that has operated openly and permissibly in Georgia for years.  It is the citizens of Georgia, through their elected representatives, who should decide whether they can continue to enjoy fantasy sports.

DraftKings will therefore support legislation that regulates fantasy sports with thoughtful and appropriate consumer protections, and we urge Georgians to tell their elected representatives that they want to be able to continue to enjoy fantasy sports. “

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