Hawaii Attorney General Doug Chin issued a formal opinion today that daily fantasy sports contests constitute illegal gambling under state law.
“Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under the person’s control,” Chin said in a news release. “The technology may have changed, but the vice has not.”
Hawaii is the latest state to declare fantasy sports illegal. New York, Illinois and most recently Texas, have issued similar opinions.
It doesn’t mean that fantasy sports betting will immediately stop in Hawaii.
Fantasy sports companies disagree with the state attorneys general and sued the Illinois attorney general over the opinion that fantasy sports betting is gambling.
“This involves games of skill and individuals acting as general manager of a team that is in competition with other teams,” said Randy Mastro, a New York-based attorney representing DraftKings in Texas told the Fort Worth Star-Telegram. “It’s for predetermined prizes.
“For everything from beauty contests to bass fishing, you pay a fee, you compete and you win a prize,” he said. “It’s perfectly legal and always has been.”
The issue also appears to be headed to court in New York.
The debate centers on whether the games rely on skill or chance.
Participants pay entry fees to choose players and can win money based on the professional athletes’ performances in the real world.
Chin’s opinion was written in response to an inquiry from state Sen. Roz Baker (West Maui- South Maui).
Legislatures in several states are considering laws to clarify whether fantasy sports betting is illegal or should be regulated.
Nearly 60 million Americans participate in fantasy sports, with the vast majority playing in a league with friends or colleagues that might be considered “social gambling” which is legal in Hawaii, the attorney general said. In contrast, daily fantasy sports contests typically involve competitions between hundreds or thousands of people, are played daily, involve wagers of up to $1,000, and allow each individual multiple entries leading to top prizes of up to $1 million, Chin said the news release.
DraftKings and rival FanDuel have become a major source of revenue for professional sports teams, and their ads were everywhere on television during this NFL season.
The attorney general said the office is considering the next steps to take, including civil or criminal enforcement.
Star-Advertiser news services contributed to this story.