Gaming, Gambling & Fantasy Sports

NY Court of Appeals Hears Constitutional Challenge to Fantasy Sports Legislation

Published: Oct. 05, 2021

A quick take on Oral Argument in White v. Cuomo from October 5, 2021

In an active oral argument marked by intense questioning from the court that revealed a strong hostility to the concept of fantasy sports, several judges from the NY Court of Appeals (the highest state appellate court) suggested that fantasy sports is no different than sports betting. Rather than focusing on the question of what standard the legislature should have applied when finding that fantasy sports are not gambling, several judges suggested that only the Court of Appeals itself can make a determination on whether an activity is gambling and that the legislature has no meaningful role in evaluating what constitutes gambling under the constitution. As such, several judges suggested that the only way to legalize fantasy sports under the NY Constitution was through a constitutional amendment which must be passed in a ballot initiative. The court seemed entirely disinterested in analyzing fantasy sports under either the predominance or material chance standard.

In so doing, two judges dominated the argument and suggested that the question of skill versus chance is not the appropriate method to determine what constitutes gambling under the constitution, and instead that the court should look to history or public perception about what constitutes a gambling activity. Another judge went further – asking whether, if they determine that the contests constitute gambling, that makes the DFS companies bookies. Despite an uphill battle against an adverse bench, the state AG ably argued that roster selection from fantasy sports is a skill-based activity separate and apart from the underlying sporting event. But the court suggested that the element of skill may be irrelevant because games like poker may be skillful and poker is already understood to be gambling.

Listening to the argument leaves the strong impression that the court will not uphold the legislature’s determination that fantasy sports is a skill-based activity that is not gambling, and therefore it will require a constitutional amendment to be legalized in New York. It also leaves the impression that the court’s decision may be more influenced by an antipathy to anything that resembles gambling than a rational legal analysis. Of course, the ultimate outcome of the case is a future contingent event outside the control of anyone but the court. Nevertheless, despite the outcome of this case, lawyers and investors are free to act on their predictions without being accused of engaging in gambling over an activity they can’t control. Fantasy contestants in New York, likely not so much.