By Brian Menaker and Kevin Cattani
A scandal stemming from NCAA athletes’ gambling activity made news in late February when it was reported that five players from the University of Richmond baseball team were suspended for taking part in a fantasy sports contest with a monetary award. On March 31, it was reported that the five players wagered on sporting events via sports gambling websites. Four of the five student-athletes were reinstated on April 7, while the fifth will be eligible for return in 2018. While it turns out that sports wagering, rather than fantasy sports, was the reason for the player suspensions, news of the suspensions commenced a debate about whether the NCAA should be sanctioning athletes for fantasy sports participation. More important, however, this story confirmed the plausibility that more athletes could be potentially sanctioned due to the growing ubiquity of daily fantasy sports platforms with cash payouts such as industry leaders FanDuel and DraftKings.
The NCAA’s stance on gambling falls clearly on the side of full prohibition on all activities involving wagers by student-athletes. The organization considers legal and illegal sports wagering potentially damaging to the welfare of student-athletes. “The NCAA membership has adopted specific rules prohibiting student-athletes, athletics department staff members, and conference office staff from engaging in sports wagering” (Bylaw 10.3). According to the NCAA’s “Don’t Bet on It” pamphlet, sport wagering is defined as “putting something at risk — such as an entry fee – with the opportunity to win something in return.” This includes any bracket competitions where both an entry fee and prize are incorporated into the contest. Under current NCAA rules, administrators and student-athletes are permitted to enter a bracket competition where there are prizes offered, but no entry fee.
Following this logic, the NCAA prohibition on sports betting includes fantasy sports games where there is an entry fee and there are cash prizes. However, the temptation to wager on sports is evident in today’s student-athlete population, especially with the growing promotion and popularity of March Madness pools and daily fantasy sports platforms. “Despite NCAA regulations prohibiting sports wagering for money, 26 percent of male student-athletes report doing just that, with 8 percent gambling on sports at least monthly.” (Derevensky & Paskus, 2014). No studies on student-athlete behavior related to daily fantasy sports currently exist. Despite this lack of research, it is plausible that some of the gambling activity described above occurred on fantasy sites.
Returning to the issue of the University of Richmond baseball players’ suspension, although this compliance issue is reportedly not related to fantasy sports, why is this still relevant to DFS? In other words, what are the implications of college athletes taking part in DFS? Is this a compliance issue? While DFS is legal in the University of Richmond’s home state of Virginia, sports wagering is not. The Professional and Amateur Sports Protection Act (PASPA) banned all sport wagering with exemptions for states that filed before the 1993 deadline: Oregon, Delaware, Nevada, and Montana. The Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed to regulate online gambling, has a provision that states fantasy sports is exempt from the law. DFS emerged from this exemption. However, DFS has the appearance of gambling and has received much scrutiny from many states. Nine states now have laws addressing the legality of daily fantasy sports, while many others have proposed bills in their legislatures. DraftKings and FanDuel operate in 40 states. All U.S. operators do not sponsor DFS with college sports results. Regardless of whether playing DFS is permitted by law in the location where a student-athlete plays, the NCAA considers DFS sports gambling a prohibited activity for its athletes.
So, how does this have potential application to DFS? Many of the same issues inherent in more traditional forms of sports gambling and addressed by the “Don’t Bet On It” campaign exist in the DFS environment. Users still put up their own money in hopes of winning bigger prizes. DFS presents just as big a compliance issue as traditional sports wagering because in addition to the actual wagering, as mentioned above, the NCAA considers DFS in the same league as more traditional sports wagering enterprises.
The fact that the University of Richmond baseball player bans were national news provides ample evidence that there are compliance implications for future incidents for NCAA student-athlete participation in DFS. Although further investigation determined that the activities of the student-athletes were not conducted on DFS sites, the potential implications are nonetheless frightening. A major issue with this kind of wagering is that many of the game’s users compete in one-day contests. Student-athletes could be more prone to being active in DFS due to this continual nature.
What does this mean in the context of the NCAA and gambling in general? DFS adds a new layer to the allure of the gambling world, as student-athletes may see it as a fun fantasy-type competition. Many of the traditional fantasy sport leagues cost nothing to enter and offer no payouts, but DFS does both. This new layer of concern could add to the list of point shaving and match fixing cases the NCAA has suffered in its recent past. Furthermore, it simply makes sport wagering more accessible and easier for student-athletes to take part in, regardless of whether it runs counter to NCAA rules or not. It seems clear that DFS will need to be a point of emphasis in future study and rules education for the NCAA and its member schools going forward.
Menaker is a sports law professor at Texas A&M University-Kingsville.
Cattani is a sports law professor at the University of Dubuque.
