Alabama, Tennessee Deem Daily Fantasy Sports Illegal

Alabama and Tennessee are the latest two US states to have found daily fantasy sports websites to be illegal gambling, thus adding another blow to leading DFS operators DraftKings and FanDuel.

Alabama Attorney General Luther Strange announced on Tuesday that cease and desist letters have been sent to DraftKings and FanDuel, as the two gaming operators have been banned from operating in the state from 1 May.

Strange revealed that his office had found that daily fantasy sports contests were illegal under current Alabama law, as any contest where participants risk monetary possessions in an attempt to win a prize qualify as illegal gambling, regardless of the degree of skill involved.

The Alabama Attorney General believes that while some skill is involved, the DFS participants rely on chance most of the time, so there were no doubts in his mind regarding the final outcome.

Alabama thus followed in the footsteps of Vermont, Texas, Mississippi, New York, Hawaii, Illinois and Georgia, and little did they know that Tennessee will follow in their example just a day later.

Tennessee Offers Hope to DFS Operators

Just a day after Alabama banished DFS websites from its territory, Tennessee did the same, although they were not as harsh as Alabama, leaving the operators a slim hope at least.

Tennessee Attorney General Herbert Slatery revealed his opinion that daily fantasy sports contests were illegal under state law, which defines gambling as any activity where players risk anything of value for profit that depends on chance in any degree.

At the moment, only “lawful business transaction”, which includes state lottery and events run by non-profit organisations, acts as an exception to the gambling law.

The opinion of the Tennessee Attorney General does not only include DFS operators, but also all fantasy sports events that require an entry fee.

Meanwhile, Slatery has opted against issuing a cease and desist order to DFS operators, stating that it is up to General Assembly to decide on whether they wish to add DFS contests to the list of gambling exemptions.