The online paid fantasy sports companies DraftKings and FanDuel have the rest of April to make what money they can in Alabama now that the Yellowhammer State has become the 11th to outlaw their operation.
On Tuesday, Attorney General Luther Strange said both companies had been issued cease and desist letters and have until May 1 to end their operations in Alabama. Strange said the decision followed a review of the state’s gambling laws, concluding “paid, daily fantasy sports contests” clearly qualify as gambling.“Daily fantasy sports operators claim that they operate legally under Alabama law,” Strange said. “However, paid daily fantasy sports contests are in fact illegal gambling.”
Under Alabama law, an activity constitutes illegal gambling if a person stakes something of value on a contest of chance, even when skill is involved, in order to win a prize.
Operations like DraftKings and FanDuel — like their unpaid counterparts — allow players to create a “fantasy roster” of real-life athletes. The athletes are then awarded points based on their individual performances, and the player with the highest scoring rosters win a cash prize.
While Strange said selecting a fantasy sports roster does take “a measure of skill,” he said contestants ultimately have no control over the performance of their players — suggesting a player “could fall ill before a game, be injured in pre-game warm-ups, or miss a large portion of the game due to injury or equipment failure.”
Concluding his statements, Strange said because of the dependence on a degree of chance, paid fantasy sports leagues fit the definition of gambling under Alabama law.
Entry fees for contests on DrafKings are set by the users involved, which means the cost to participate can vary. A quick review of the website shows a range from $.25 to $5,300 with millions of dollars in cash prizes available.
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