Are Daily Fantasy Sports Leagues Legal?
Participation in daily fantasy sports for real money is legal in the US and Canada. The Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 contained exemptions since it’s a game of skill. The only exceptions are in Arizona, Iowa, Louisiana, Massachusetts, Montana, Nevada, New York, North Dakota, Oregon, Puerto Rico, Vermont, Virginia and Washington, where we do not operate because of state law.
See the excerpt from UIEGA below which distinguishes online sports betting versus participation in daily fantasy sports::
Fantasy Sports has a specific carve out in the Unlawful Internet Gambling Enforcement Act (UIGEA)
§ 5362. Definitions
In this subchapter:
(1) BET OR WAGER. The term ‘bet or wager’–
(A) means the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome;
(B) includes the purchase of a chance or opportunity to win a lottery or other prize (which opportunity to win is predominantly subject to chance);
(C) includes any scheme of a type described in section 3702 of title 28;
(D) includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering; and
(E) does not include–
(ix) participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:
(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
(III) No winning outcome is based–
(aa) on the score, pointspread, or any performance or performances of any single real world team or any combination of such teams; or
(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.
You can read the entire UIGEA here