With Rulings, Fantasy Sports League Players Have Reason to Rejoice

Feb 1, 2008

By Ryan M. Rodenberg
Fantasy sports league players should celebrate. And it has nothing to do with how many touchdowns Tom Brady or Peyton Manning threw during the recently completed NFL season. Nor does it have anything to do with points scored by Kevin Garnett and Ray Allen in their Boston Celtics debut.
Instead, they can thank Morris S. Arnold and Dennis M. Cavanaugh.
Arnold and Cavanaugh aren’t unknown players mistakenly overlooked in the last fantasy draft. Rather, they are federal court judges who recently ruled on important legal issues central to the continued viability of the wildly popular fantasy leagues – a $1.5 billion industry with at least 15 million players.
“We hold that [the] First Amendment rights in offering…fantasy baseball products supersede the [MLB] players’ rights of publicity,” wrote Judge Arnold in his October 16, 2007 C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P. opinion.
And, with that single sentence, fantasy leaguers should be happy. Player names and statistics, key aspects of the internet-fueled phenomenon, now have First Amendment protection.
The other lawsuit yielded a similar fantasy-friendly result.
“As a matter of law, the entry fees for…fantasy sports leagues are not ‘bets’ or ‘wagers,’” wrote Judge Cavanaugh in Humphrey v. Viacom, Inc., et al.
So, paying entry fees for participation in fantasy leagues isn’t considered illegal gambling either. That’s good news to wannabe general managers across the country.
In the wake of several sports scandals the past few months, the import of these two cases has been largely overlooked. In the first lawsuit, a small-time baseball fantasy league operator named CBC filed a complaint against MLB’s media arm. The lawsuit sought a declaratory judgment stating that it is okay for CBC to continue to use actual player names and statistics in its fantasy league.
Why did CBC sue the monolith MLB? Well, MLB posited that all player names and accompanying statistics are “owned” by MLB. At the same time of the litigation, MLB was planning to launch its own “official and exclusive” baseball fantasy league, where MLB would collect all entry fees and distribute the loot among its teams and players.
Because “the information used in CBC’s fantasy baseball games is all readily available in the public domain…it would be strange law that a person would not have a First Amendment right to use information that is available to everyone,” wrote Judge Arnold.
No one wants “strange law.” As a result, fantasy players will continue to have a wide choice of leagues in which they could participate. For now. MLB is hinting that it may appeal the decision to the U.S. Supreme Court.
In the other case, a Colorado attorney filed a class action lawsuit in New Jersey alleging that thousands of fantasy league players should be entitled to recover monetary damages from ESPN.com, CBS Sportsline, The Sporting News, and other fantasy league organizers. The complaint asserts that such media outlets are, instead of merely operating a fee-based fantasy league, running (and profiting from) illegal gambling ventures.
Judge Cavanaugh dismissed the case, finding fantasy sports to be more about skill than luck. He also concluded that, unlike actual gambling, there are no winners or losers in the fantasy leagues.
Like video games, fantasy sports leagues wouldn’t be as popular as they currently are unless real players and statistics were used. If a computer randomly spit out statistics to accompany hypothetical players, there would be a measurable drop-off of interest in both the fantasy leagues and the actual games with the players.
MLB, and other sports governing bodies such as the NFL and NBA, should recognize this. A significant portion of the fans paying high ticket prices, buying team-licensed merchandise, and purchasing products advertised on the game telecasts follow certain teams and players because they are managing their own fantasy teams. It would be foolish for MLB, and others, to go after the CBCs of the world for something anyone can read in the newspaper or online.
With both court decisions recently being handed down, fantasy leaguers should sleep well at night knowing that they aren’t illegally gambling or are at risk of having their favorite hobby monopolized. That is, of course, if they sleep at all. Maybe they are pulling an all-nighter looking for someone willing to trade a second-string running back for their back-up quarterback before next week’s game.
Ryan M. Rodenberg, Esq. teaches sports law at Indiana University – Bloomington. He can be contacted at rmrodenb@indiana.edu or www.sportslawprofessor.com. © Ryan M. Rodenberg 2007.


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