“Fair Game,” “Fair Game” “Fair Game” and Daily Fantasy Sports

Super Bowl 50

Super Bowl 50

What is “a fair game?”  According to game theory,   it’s one in which all participants have an equal chance to win whatever is at stake.  A classical lottery is a fair game in that sense.     Any game of pure chance, even when the house gets a cut on every round, is a “fair game”  among  the wagering  participants  if there’s no cheating.

There is another meaning to “a fair game,”  this  one  from sports: a contest that follows explicit rules agreed to by all participants and does not allow cheating.  No pretense in this kind of fair game that all contenders have an equal chance to win.  Skill, that is getting and holding an advantage over the opponent(s),  is paramount. Strength, stamina, strategy, practice, motivation and innate talent are some elements of athletic skill.    Pitting an Olympic volleyball team all out against the junior varsity of a 300-student high school is “fair”  in this sense  if  the rules of volleyball  are followed, yet everyone who hears about such a “contest”  knows it’s “not fair.”  Even if the rules are strictly followed, the HS team has absolutely no control over the objective  outcome, i.e. who wins.   By contrast, a big urban marathon is “fair”  in the sports sense and in the ethical sense.  Everyone is aware that among 5000 female entrants the first-place finisher will be one of twenty women identified days before.  The other runners have no thought of winning.  Who places first is not under their control.  They do, however,  have control over other outcomes such as logging a personal best or completing their third marathon of the year or  simply finishing.   These events (accomplishments) have subjective, not objective,   value.

Live poker has a different skill set than athletics.  A trained memory, long attention span, ability to mentally reckon probabilities and a knack for reading other people’s body language are some of the requisites.

What is “fair” in the sports sense becomes unfair in playing for a money prize or for public honor when disparities in the multiple dimensions of skill  are overwhelming.    The facade of fairness can also warp into actual unfairness  when  the supposedly explicit rules are vague,  deliberately obscure or pliable or not enforced.  This leads down a slippery slope through “gamesmanship” to outright cheating.  Both situations – disparities in skill or bendable rules – mean that some of the participants  have no control over an objective outcome like winning money or  public accolades.

Now drop the “a” and take the phrase “fair game.”  This today  usually means someone whom circumstances (e.g. elected public office,  past history) have made a subject of  criticism or ridicule.  The original meaning came from field sports: quarry taken under established rules such as “don’t shoot sitting ducks.”   Such rules are not to bring parity in survival chances between hunter and hunted. They are just codes against cheating.   Examples of  this kind of “fair game”  are birds shot on the fly or, to some,   rats penned with a terrier.

Learned counsel for Daily Fantasy Sports distance their clients from the “fair game”  model of gambling, declaring that a small fraction of participants take home 90%  of the prize money.

Learned counsel argue that this handful are more skilled than the others, which no one denies.

Learned counsel argue that for the elite handful the outcome (cumulative money won over time )  is under their control; therefore, “it’s not gambling.”    Perhaps it isn’t  for the handful, but it is for everyone else who has no control over the outcome once they are “swimming with the sharks.”

Learned counsel want courts to consider DFS a fair game in the second sense: people enter of  their own free will,  aware  of  rules.  In that sense it is as fair, or as unfair, as the volleyball matchup above.  All persons who enter become “fair game”  for the elite handful whose skill is in sourcing or building  computerized routines to select their players.

If a group of people unfamiliar with  National Football League players were invited to  play a few weeks of  DFS,  90% of the winnings would not follow 10% of the players.  One week’s big winner would flop the next.  If the group is then joined by a friendly stranger who uses customized computer programs to pick his team, that f.s. might fare badly in one week, but would be sure to win more money over time than anyone  else.  Among  players of equally low skill, chance rules completely,  as it nearly does among those  who are all at the same high level.  The effect of skill on outcome emerges when skill levels vary across the players.  Throw in one player much better than all others and the role of chance goes down for him with respect to the rest. He may be so well-informed that he is doing prudent investing, not gambling.    Everyone else is gambling.

DFS is a hustle.  It is not a “fair game” in the game theory sense.  It is not fair in the sports sense because too many matchups are patently not fair, but rather the equivalent of the volleyball game  above.  The only “fair game”  in the story  is the group of new players who jump in thinking they can win big,   not knowing what they are up against.

The prizes come from “entry fees.” which DFS partisans say are not wagers.  If the guaranteed prize pool is $100,000  the companies say entries are closed at  a fixed pre-specified ceiling above  $100,000 such as $112,000.   If  $112,000  of entry fees came in and $100,000  is paid out to winners, the company pockets $12,000 for its trouble in enabling the “competition.”  If only $90,000 of entry fees came in the company has to pony up the other $10,000 to meet the purse money.  DFS is thus “house-banked.”   This gives a very strong incentive to fill every round.  Thus the advertising blitz to recruit new entrants and retain previous ones with accounts of fabulous winnings by smart neophytes.   A house-banked game is different from an office March madness pool where the amount going to the winners is determined by how many people have entered at the start.  If each entry costs a dollar, and twenty enter, then twenty dollars is divided.  If a hundred enter, the pool is $100.

DFS is  a house-banked hustle.  That’s gambling.

Permission is granted to reproduce this essay in whole or part as long as the permalink is cited.  The opinions are those of the author, Stephen Q. Shafer and are not necessarily shared by any or all members of Coalition Against Gambling in New York .  The photo image is from Flickr Creative Commons 24805517021_3fc6989ef3