Are Some People Too Big To Prosecute? How Money Rules Our Prosecutors

justice weepsThe laws I have set out below are being openly flaunted by people and nothing is being done. Walking through South Station the other day billboards announcing the ongoing taking of these bets were everywhere; watching football on television over last weekend it appeared that the people running these gaming operations were closing in on spending the same amount as the beer or automobile advertisers.

The Patriot Ledger reported on September 17, 2015, that Attorney General Maura Healey was “reviewing the legality of the Boston-based fantasy sports website Draft Kings.” Another article about her is here.

What is there to review? Fantasy football is pure and simply gambling.

You want the real proof it is gambling well here is DraftKing’s site. Here’s what it says: “Build your team in only minutes and watch your scores update live online.” What skill is involved in that? Absolutely none. Anyone with enough money can take a chance.

You want more proof it is pure chance. I could go on the site and construct my own team. I know next to nothing about the teams or the players. Any chance of me winning would be pure chance and that is why its operation is a felony under the Massachusetts General laws.

Is there hesitation to enforce the law because DraftKings is partners with the much loved New England Patriots which makes it above the law. Or is gambling all right if ESPN sponsors it rather than the Mafia? Is it that the influence of the networks so dependent on the advertising money is so great that the prosecutors fear alienating them by enforcing the laws?

According to the Patriot Ledger, “The site maintains it hosts a game of skill and is legal under U.S. and Canadian law, though it bars residents of Arizona, Iowa, Louisiana, Montana and Washington from participating because of local regulations.

It also noted: “These are skill-based games that match sports fans against each other in a contest of sports knowledge and strategy that is fundamentally different from wagering on the performance of an individual player or the outcome of a particular game,” Peter Schoenke, chairman of the Fantasy Sports Trade Association, told the Boston Globe in a statement.

There is much more skill involved in playing blackjack or Texas hold’em or horse racing than there is in playing fantasy football. Those games are all subject to our gambling laws. There are some people who gamble every week on the outcome of football games in the NFL who are extremely skillful and who spend many hours studying the teams, weighing the odds, and making informed bets. No one ever said their skill was not gambling.

It is a crime under the law to make a payment of a price for the possibility of winning a prize, depending upon hazard or chance. The Fantasy people say you are paying a price to win something but there is no chance involved because you are using “sports knowledge and strategy.” Isn’t that what all sports gamblers are using especially when betting against the line.

Here’s a good summary. “As a general matter of state law, fantasy football contests are illegal if they involve three elements: consideration (e.g., an entry fee), reward (e.g., a prize) and chance.  Here, the precise definition of ‘chance’ varies by state.  In a majority of states, play-for-cash contests are only illegal if they involve more chance than skill (“predominant purpose test”).  By contrast, in a few other states, fantasy football contests are illegal if results are based even in the smallest part on chance (“any chance test”).  Some examples of states where fantasy football is likely illegal if it involves any chance at all include the following: Arizona; Arkansas; Louisiana; Montana; Iowa; Tennessee; and WashingtonHere is another discussion about the issue.

The law is clear. Because I can play the game it is a game of chance. I admittedly have no skill at all but for a wager I can get a prize. It is a classic definition of gaming. There are thousands more just like me. The prosecutors may turn a blind eye to this but how do they then justify punishing others involved in gambling activities?

Laws being violated that are felonies.

Massachusetts General Laws Section 16A states: “Whoever knowingly organizes, supervises, manages or finances at least four persons so that such persons may provide facilities or services or assist in the provision of facilities or services for the conduct of illegal lotteries, or for the illegal registration of bets or the illegal buying or selling of pools upon the result of a trial or contest of skill, speed or endurance of man, beast, bird or machine, or upon the happening of any event, or upon the result of a game, competition, political nomination, appointment or election, or whoever knowingly receives from at least four such persons compensation or payment in any form as a return from such lotteries, such registration or such buying or selling shall be punished by imprisonment in the state prison for not more than fifteen years or by a fine of not more than ten thousand dollars, or by both such fine and imprisonment.”

Section 17 provides: “Whoever keeps a building or room, or any part thereof, or occupies, or is found in, any place, way, public or private, park or parkway, or any open space, public or private, or any portion thereof, with apparatus, books or any device, for registering bets, or buying or selling pools, upon the result of a trial or contest of skill, speed or endurance of man, beast, bird or machine, or upon the result of a game, competition, political nomination, appointment or election, . . . shall be punished by a fine of not more than three thousand dollars or by imprisonment in the state prison for not more than three years”

 

29 thoughts on “Are Some People Too Big To Prosecute? How Money Rules Our Prosecutors

  1. The ads for these gambling operations are everywhere — not just sports TV. I think the feds should shut them down nationally. The ads seem to be aimed at nitwits, who are more in need of government protection than ordinary folks.

    1. Dan:

      For some reason (obviously the influence of the NFL) the feds excluded fantasy football from the types of gambling that were illegal. It has not been excluded in MA. Of course the ads are aimed at nitwits but those are the people who make the NFL owners and the people behind these gambling schemes rich. There’s an old saying: “a fool and his money are soon parted.” If the NFL owners could figure out how to get a cut out of the Mafia money being waged on their games those too would be protected.

  2. Matt,
    Do you support a casino in Massachusetts?
    I do.
    I am not a gambler. Never bet on games. Been to Foxwoods probably 5 times in my life,…Atlantic City once.
    I buy a scratch card once in a while or drop a finner on Keno, that’s about it.
    But I think gambling should be legalized.
    A lot of Massachusetts dollars (that should stay here) are spent out of state on gambling.
    A casino would create jobs, generate revenue, and recoup the dollars being spent outside Mass.
    I bet we could tap into some of the illegal dollars spent and recoup those too.
    Casino in Massachusetts……Yes, Sir.
    Legalize gambling…….you got my vote.
    Fantasy football……why ignore the limitless demand, legalize it and make money off it.
    Win-Win-Win for Massachusetts.

  3. “Is there hesitation to enforce the law because DraftKings is partners with the much loved New England Patriots which makes it above the law. Or is gambling all right if ESPN sponsors it rather than the Mafia?”

    Perhaps, until someone is arrested, prosecuted and convicted. The only real difference now is the knowledge that resources are in place for bail and a vigorous defense in a court of law.

    In the meantime, can you say “RICO”?

  4. Oh Fantasy Football …..the outrage!!!! How about an article about the corrupting power of money in politics instead? You seem to have a visceral distaste for the game.

  5. I think Matt has a point. This is clearly an unregulated form of gambling that is ripping off the average bettor. DraftKings and FanDuel take about 10 percent off the top. The overwhelming percentage of the remaining betting pool money is won by math and/or poker geeks who use specialized computer programs. These two companies take “fantasy” action on all major professional sports, and an expert interviewed by the Wall Street Journal estimates that 91 percent of the fantasy winnings paid out during the first half of Major League Baseball season went to these sharpies, who constituted just 1.3 percent of the bettors.

    “It’s not what it pretends to be,” a second expert told the Journal. “It pretends to be, ‘Hey pick your favorite players, spend a few bucks and root for them.’ But if you pick your favorite players you will lose a lot of money.”

    One of the Journal experts thinks that once the “suckers” figure this out, the fantasy football companies might be in trouble.

    I’m not even going to get into the hypocrisy of the many NFL teams who have deals with these companies. (The NFL Players Association has also cut a deal with one of these companies.)

    Below is a link to a Buffalo News story with a good overview of fantasy football gambling. I’m also including a link to the Journal story, even thought it’s a pay site. If you’ve got a subscription, check it out:

    http://bills.buffalonews.com/2015/10/03/leagues-use-legal-loophole-on-gambling-to-profit-from-daily-fantasy-games/

    http://www.wsj.com/articles/daily-fantasy-sports-operators-await-reality-check-1441835630

    1. “You want more proof it is pure chance. I could go on the site and construct my own team. I know next to nothing about the teams or the players. Any chance of me winning would be pure chance and that is why its operation is a felony under the Massachusetts General laws.”

      I would call that an opinion not proof. I could also blindly answer the SAT and do well, but my chances are likely awful compared to the kid who studied and knows the material. I could blindly throw a lure in the water and catch a huge fish, but I bet the angler who knows the tide, the bait, the locations, etc. will catch the bigger fish 9x out of 10. The same goes for fantasy sports. The more you know about stats, defenses, offenses, injuries, backups, matchups, etc., the better you are going to do. Yes, there is the random person who picked their team because they like the jersey colors who does well (I’m looking at you Matt!), but they are few and far between. Here is the biggest difference between fantasy and casino games, YOU GET TO PICK YOUR TEAM. You don’t pick the cards you are dealt in poker/blackjack, and you sure as hell can’t compare predicting the skill level of a human being in a game vs. the skill level of a farm animal in sprinting.

      1. Dave:

        If you play with the bookies and pick a team with the odds that is called gambling and is prohibited. You do the same thing with fantasy. My point is they are both the same and one is a felony and the other is a billion dollar business and is too big to stop even though it is illegal.

        In your examples of the SAT and fishing you don’t pay a price for a chance to win a prize although in some fishing contests that is the case. The sad part about this whole matter is that the attorney general is studying it. As I wrote “what’s to study?”

        1. The New York State Attorney General has gotten into the act by requesting a raft of information from DraftKings and FanDuel. These two companies have been Wall Street darlings, but they’re both vulnerable to what the Wall Street Journal calls “regulatory risk.” Should be interesting to see if the hedge funds and other investors double down or get out of the game. I think these two companies have been sketchy at best from the outset. I was surprised to learn that established businesses like Fox, NBC, Comcast and, of course, the NFL, had jumped in with both feet.

          1. Dan:

            Too bad we don’t have any federal prosecutors capable of tackling something a little more complicated than an union picketing situation where the union guys get a little rough. You have Draftkings in Boston where a guy pulled an obvious fraudulent stunt using inside information to pull in $350.000. I’d add to that where is our attorney general who is trying to figure out if this is a gambling group which is operating in violation of our gaming laws which of course it is. If she says it is not, then she opens the door to the Mafia putting their betting lines on the internet because what applies to fantasy football also applies to the usual betting on games. The DAs are also sitting back doing nothing.

            Of course all the so-called legitimate businesses are jumping in because they see that the gaming laws are not being enforced and they look at guys like Adelson and Wynn and their billions and want to also get a cut out of the gambling money.

          2. Matt: Preet Bharara, the US Attorney in Manhattan, is extremely ambitious. It wouldn’t surprise me to see him jump into this. Carmen Ortiz still seems to think Bulger is Public Enemy No. 1. That goes for the Globe too. The newspaper should be all over the story of Boston – based DraftKings.

          3. Dan:

            I wouldn’t be surprised if the owner of the Globe John Henry did not have an interest in Draftkings which would account for all being quiet in the Globe and the Boston U.S. Attorney’s office. You have to keep in mind that going after real criminals or big business operations is difficult business. That is why you never see Ortiz’s office doing anything complicated. It is only interested in statistics.

            Ass fro the US Attorney in Manhattan if he is too ambitious he might be looking at another job in which case he will need contributions so not knowing the guy I cannot predict his actions.

          4. Matt: The extent to which these two dicey companies have hooked up with major league sports is part of what makes the story so good. MLB says it was surprised to learn that employees of these companies were gambling on each other’s sites!

          5. Dan.

            I think if you look at all the responses everyone recognizes this is outright gambling that is illegal. Figure out why no one is enforcing the law. Start with too much money to take on.

          6. Afterthought: I see the Globe has jumped on to the story this morning. That’s all to the good. The newspaper has also figured out that regulation is needed. Maybe this will push the seemingly timid Mass. AG to take meaningful action?

  6. I’m guessing that most of the average fantasy football players have lives: jobs, families, outside interests. That puts them at an enormous disadvantage vis a vis the full – time geeks who make hundreds of plays based on some computer model or algorithm. It’s a rip – off really. Now let’s shift the scene to the most popular casino in the U S. No, it’s not in Las Vegas. It’s in Queens. The joint is loaded with nothing but slot machines. Now, slots are a sucker play, right? Well, not so much. By law, the casino must return 90 percent of the money bet to the players. But since there’s no real way to beat the slots, this money flows into the hands of ordinary players who know that over time, chances are they’ll get 90 percent of their money back. That’s a reasonable price to pay if you enjoy gambling. Now, the average fantasy football player gets to pick his own team, but less than 10 percent of the money he bets comes back to him in winnings. That’s my idea of a sucker play. You also get to pick your own numbers in the lottery, right? Big deal. It’s still a sucker play.

    1. You aren’t being forced to play these games. You pick your team. Daily fantasy leagues have a wide variety of choices, you can play in a high risk, high reward league where you buy in at about $10-$25 and can win $100,000-$250,000 or you can play in the low risk low reward games called 50/50 where the top 50% of players in the league get paid out a small sum, but always more than the buy-in. Not really a sucker’s play if you have a 50% chance of getting a return.

        1. I’ll concede defeat on this one ;). But at the same time, the NFL, NCAA, and feds really need to just make this legit, it would squash a lot of the underworld’s involvement, and they could put some sort of oversight or limits on it so that people who get wrapped up in gambling and lose their entire savings won’t be allowed to do so. You could put limits on how much/how many wagers you make etc. Right now the whole wink and nod circumstance is just blatantly corrupt. ESPN and other mass media outlets publish the point spreads! ESPN has a whole section of its website dedicated to gambling. It is absurd. I suspect nothing will change because the NFL, NCAA, etc. all make money off of illegal and legal gambling via indirect sources of revenue (tv ratings, direct tv NFL packages, etc.)

          1. Dave;

            A lot of the people I know play fantasy football including very close relatives. I have no problem with it other than it is illegal. The same thing went for the bookies who I used to chase down. I knew many guys who bet (I’d ask them who their bookie was but they wouldn’t tell me) and that is how they enjoyed games. They were not doing anything illegal but the guys taking the bets and running the enterprises were.

            Early on in my prosecutor career I suggested it all be made legal. I argued with the head of a newspaper’s sports department telling him his paper was hypocritical publishing the odds and the line every week and being against making sports gaming legal. He said they published them only for people who did not gamble. He knew as well as I did that they were helping the illegal gaming.

            My point is this – if it is illegal the duty of a prosecutor is to enforce the law across the board. You can’t be chasing guys taking bets on football games and then letting guys taking the bets on fantasy sports off the hook. I suggest the whole thing should be legal; that the state should be involved in it and that it should be taxing all the proceeds or using them like the Ma Lottery does distributing the winnings and giving jobs to the politically connected.

            You are right to say now it is all corrupt because state officials are selectively enforcing the laws. Nevada does it right; it has legalized all of it. We should do the same thing which we do in a way with the state lottery and the new casinos. Why is it only sports betting is illegal except when done through fantasy. It makes no sense and leads to the situation we see now.

            Then you have to put into the equation that Whitey for many years (before he got into taking a cut from the drug dealers) did nothing more than run a gaming operation, like the draftkings, before the days of credit card companies when people had to deal in cash which resulted in the leg breaking and exorbitant loans. He was done in when two bookies, Jimmy Katz and Chico Krantz, were indicted for money laundering because they were doing what the draftkings are doing.

  7. To each his own, I guess, Dave. I’d like to see some figures on the volume of play in the 50-50 game. A 90 percent payout on slots, of all things, is still a better deal. I think slots players are smarter than they’re give credit for. I also think that the daily fantasy leagues are going to take a hit as more ordinary players come to realize just how stacked the deck is. I guess the 50-50 game is a recognition of that fact, no? Look. I play the lottery. I think it’s fun to dream about all you’ll do with $300 million, even though there’s just about zero chance of actually winning. If fantasy football players aren’t betting the rent money, more power to them, especially if they realize how much of the prize money is going to the geeks.

    1. I have the app on my phone. I am in a fantasy football league with my family. It just makes the games more interesting, especially when the Patriots aren’t playing. If you are betting your mortgage on a football game, I think there are more underlying issues involving the particular person than anything nefarious with the fantasy football company. This latest insight into the insider information is not a good look either, but that’s a whole different topic.

      1. Dave:

        As I mentioned I see nothing morally wrong with fantasy football. But it is illegal. I find nothing morally wrong with people gambling. It is done every minute of every day with the Lottery and Casinos. I’m for making it all legal. I must admit that when I was chasing the bookies I felt a little bit hypocritical when the March Madness came around and in the DA’s office we had one of those pools betting on the outcome. It still did not stop me from taking the winnings the year I won.

  8. Update, folks. There’s a story in the New York Times tonight that suggests that the most lucrative fantasy football games operated by DraftKings and FanDuel are, well, fixed.

    From the Time story: “Last week, an employee at DraftKings, one of the two major companies, admitted to inadvertently releasing data before the start of the third week of N.F.L. games. The employee — a midlevel content manager — won $350,000 at a rival site, FanDuel, that same week.”

    The lucky devil! And it wasn’t just him: “A spokesman for DraftKings acknowledged that employees of both companies had won big jackpots playing at other daily fantasy sites.”

    And here’s something I certainly didn’t realize: “Representatives of both companies acknowledged that many employees of daily fantasy companies were players first and had continued to compete on other sites.” Or this: “Many of these employees set the prices of players and the algorithms for scoring. In short, they make the market.”

    So, as I understand it, most of their employees are professional gamblers who rig the market and then bet their little hearts out. Neat. Very neat.

    The mechanics of the scam ran something like this: “The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed which particular players were most used in all lineups submitted to the site’s Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage to make tactical decisions, especially when an entrant’s opponents do not have the information at all.”

    Matt’s right: This unregulated Internet operation is gambling, pure and simple. And it’s fixed! Shame on the NFL (and its players association.)

    Here’s the link to the Times story:

    http://www.nytimes.com/2015/10/06/sports/fanduel-draftkings-fantasy-employees-bet-rivals.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

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