Georgia AG’s Office Determines DFS is Illegal

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The Georgia Attorney General’s office has determined that daily fantasy sports (DFS) are illegal in the state, that according to a letter from Deputy Attorney General W. Wright Banks, Jr. to Georgia Lottery Corporation Senior Vice-President and General Counsel Joseph Kim on Friday.

Kim had previously requested clarification of Georgia gambling law, asking if DFS was illegal or not based on a) the legal definition of the word “bet” and b) whether or not DFS players qualify as “actual contestants.”

In the letter, Banks noted that Georgia code defined a bet as “an agreement that, dependent upon chance even though accompanied by some skill, one stands to win or lose something of value.”

“Participants in daily fantasy sports pay a fee to participate and only a portion of that fee is paid out to the winning participants; the remainder of the fee is taken by the host site,” Banks wrote. “By paying this fee and participating, participants agree to win or lose something of value—a portion of the pot. This clearly constitutes a ‘bet’ within the meaning of O.C.G.A. § 16-12-20(1).”

And since placing a bet is illegal under Georgia law (we won’t get into all the exact scenarios), there you go. Banks added that the “skill game” argument often employed by daily fantasy sports operators doesn’t hold water, either, since there is clearly an element of chance involved with DFS, even if there is also skill.

The “actual contests” argument is also one that the DFS sites have been trying to use when fighting for the legality of their operations. Wright shoots that down, too, writing:

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. See Grant v. State, 75 Ga. App. 784 (1947) (the Georgia Court of Appeals held that while the players in baseball games have a high proficiency of skill, wagering on whether a particular player would hit a fly ball constituted chance, and thus betting, under former Georgia Code § 26-6502). To read the “actual contestant” exclusion any other way would allow the exception to swallow the rule. Therefore, daily fantasy sports do not satisfy the “actual contestant” exclusion in O.C.G.A. § 16-12-20(1)(B).

Thus, since DFS is illegal, playing it is technically a misdemeanor in Georgia. There shouldn’t be any cause to worry for Georgia residents, though – the cops aren’t about to break down any doors to stop people from playing a $2 GPP on FanDuel. It also doesn’t sound like the Attorney General’s office is on some crusade to stop DFS; it was just responding to a question from the Georgia Lottery Corporation and Banks even stressed that his response was “informal advice.”

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