European Gaming Lawyer magazine Spring 2016 | Page 19
Fantasy Sports Games
Robert Zammit, Senior Associate at WH Partners
F
antasy sports games are
not a new concept.
Countless variants of this
hobby have been with us
for decades and most
sports fans have experienced and played
either in community format or in simulation
format. The popularity of these games is
already significant and the amount of users
in community fantasy sports games
worldwide is increasing constantly.
Regulators around Europe should decide
on whether to consider fantasy sports games
with prizes as a gambling product and
issue licenses or exclude them completely
from their licensing regimes. This dilemma
derives from the singularity of fantasy
sports games whereby the element of skill
is predominant but the element of chance is
still present, with different types of fantasy
sports games requiring different levels of
skill. Certain jurisdictions consider fantasy
sports games as skill games and therefore
not a licensable product, but this approach is
not acknowledged by all jurisdictions. Some
consider fantasy sports games as products
similar to lotteries, others as a product
similar to betting.
But why should remote gambling
regulators seek to license fantasy sports
games when the games are predominately
games of skill and the risk related to these
kinds of games is low? And why should
fantasy sports games operators seek to be
licensed when an unregulated market could
be more attractive? Regulators are seeing the
opportunity to capitalise on this potential
lucrative niche by licensing and taxing a new
product, while at the same time promising
operators a reliable, maybe more flexible,
licensing regime for the operators to be able
to attract more users by showing that they
are licensed and regulated. On the other
hand, operators’ main reason to be regulated
is to be able to give a sense of security to
its users. As always achieving a balance
between the targets of the regulator and the
operator is a challenge.
One of the main US daily fantasy sports
operators, Draftkings Inc, a Boston based
company, has seen the potential of the
European market and has already obtained,
from the United Kingdom Gambling
Commission, a gambling software and pool
betting license to offer daily fantasy sports
games in the United Kingdom.
On the other hand, in Germany, a fantasy
sports game offered by Axel Springer, has
been declared by the courts as “game of
entertainment” and therefore does not
require a license, which makes the German
market an interesting and easily accessible
market for fantasy sports games operators.
Similarly in Italy the gaming regulations do
not cover these products.
The Danish regulator on the other hand
opted to change its gambling laws to allow
for a specific permit for fantasy sports.
Gambling operators holding a betting
license in Denmark are allowed to offer
fantasy sports games without the need of
obtaining an additional license but any
smaller operator wishing to offer just fantasy
sports games, may opt to obtain the specific
permit, which is a less restrictive license but
with a cap on the annual gaming turnover
and the return to players.
The Malta Gaming Authority, in the
Digital Games of Skill with Prize Position
Paper issued in December 2015, analysed
the various skill games in the market and
offers a clear indication of what the Malta
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