Fantasy Sport - Game vs. Gambling from a Thai Law PerspectiveArticles
Fantasy sport is a term used to describe a form of competition where the participants assemble virtual teams consisting of proxies of real professional players of an actual sport in a particular tournament or sporting season. The participants earn points or scores based on the performance of the players within their teams; then, the points earned by each participant are compared in order to determine the winner for each game.
With the development of modern technology and communication, fantasy sport is currently available online and can easily be accessed from any part of the world with internet access, which leads to the issue of whether such form of competition should be considered as a form of gambling since the participants would generally be required to pay entry fees for a chance to receive prizes or money for winning.
At first glance, fantasy sport seems like another, more convoluted, form of traditional sport betting where the participants would choose the team to bet on in a particular match and if such team won, the participants would receive money from the organizer. However, upon closer consideration, one could argue that there is a significant difference between fantasy sport and sport betting, e.g. the fact that the participants must choose and assemble their own virtual teams from players competing in an existing tournament, as opposed to simply picking and choosing a team that is likely to win in a particular match. As such, fantasy sport is viewed by some as a competition or game involving the contest of analytical skills of the participants to pick and choose each and every player in their teams; rather than gambling, in which the outcome is mostly based on chance and sheer luck of the participants.
From a Thai law perspective, various forms of gambling are prohibited by the Gambling Act 1935 (the “Act”). However, the Act itself does not clearly specify a definition of the term “gambling”. Although not within the text of the law itself, it may be interpreted from the Ruling of the Council of State1 and various Supreme Court Decisions2 that “gambling”, under Thai law, refers to the wagering of money or other asset(s) where there is a chance for the participants to gain money or other benefits based on their luck, rather than their skill or competency. A typical game of fantasy sport would require the participants to pay an entrance fee, in the form of money or other virtual/digital property (e.g. tickets or another method used instead of an entrance fee which may be paid for with money), for a chance to gain money or other prizes if they win the game. Consequently, whether or not a typical game of fantasy sport would be considered as gambling under Thai law would eventually depend on whether the chances of winning are based upon the participants’ luck or their skills and competency.
Currently, in Thailand, it is still debatable as to whether or not the chances of winning in a game of fantasy sport are primarily based upon the participants’ skills and competency. However, we can examine various examples from the United States in an attempt to tackle/resolve this issue. The Unlawful Internet Gambling Enforcement Act 2006 of the United States (the “UIGEA”) (i.e. an act governing online betting and wagering) specifically excludes certain models of fantasy sport under its definition of the term “bet or wager”.3 However, to be exempted, a game of fantasy sport must meet certain requirements under the UIGEA.4 These requirements emphasise that, for a game of fantasy sport not to be considered as a bet or a wager, it should be a game based on participants’ skills rather than luck. Thus, it can be seen that a method of the UIGEA in tackling this issue is to exempt a certain model of a fantasy sport game where the winner of the game is decided by the skills of each participants. However, based on the UIGEA alone, it is uncertain as to whether or not a typical game of fantasy sport is considered under the law involving the skills of the participants.
In the case of Humphrey vs. Viacom, Inc.,5 the United States District Court of New Jersey stipulates in its finding that the entry fees for fantasy sport are not “bets” or “wagers” because: (i) such fees are paid unconditionally; (ii) the prizes offered to fantasy sport participants are for definite amounts which are guaranteed to be awarded; and (iii) the participants do not compete for the prizes. Additionally, the winning participants are not “winners” as a matter of law; rather, they are parties to an enforceable contract, whereby the organizer provides administration to an online event, as well as statistical and analytical services, and the participants provide the entry fees for such event and services. This judgement indicates that fantasy sport (of this particular model) cannot be considered as illegal gambling because the participants do not participate in any “bets” or “wagers”, and there are no “gambling losses” (i.e. the participants do not lose anything when they do not win the competition because the entry fee is considered as a one-time, non-refundable fee in exchange for administrative, statistical and analytical services).6 The judgement also indicates that the winning outcome of the fantasy sport, in this case, reflects the knowledge and skill of the participants through the United States District Court of New Jersey Court’s interpretation of the UIGEA to dismiss the case.
From an academic point of view, a recent study in 20187 concluded that, based on statistical data of the participants, participants who are experienced with the particular fantasy sport/game have a higher win percentage and the participants’ actions (e.g. the choice of fantasy players) have influences on the outcome of the game. This seems to indicate that fantasy sport is a game of skill rather than chance. However, as there has been relatively little research performed on this topic, therefore further studies may be needed to categorically conclude that fantasy sport is actually a contest of skills of the participants.
In Thailand, unlike the United States, the topic of fantasy sport is somewhat disregarded due to its low popularity within the country currently. As such, it is still not conclusive as to whether fantasy sport would be considered as gambling prohibited by the Act or a game of skills operatable under the laws of Thailand. However, without specific permission for the particular fantasy sport (or its variants) under a law similar to the UIGEA - an official ruling addressing this matter or judgements from the Court for guidance; the private sector attempting to conduct the business of fantasy sport and the parties involved would be exposed to the legal risk of the potential violation of Thai law.
This is intended merely to provide a regulatory overview. It is not intended to be comprehensive, nor to provide legal advice. Should you have any specific or general questions on this or on other areas of law, please do not hesitate to contact any of the authors.
- 1 Ruling of the Council of State No. 589/2545
- 2 Supreme Court Decision nos. 2542/2527 and 142/2479
- 3 Unlawful Internet Gambling Enforcement Act, 31 U.S.C. § 5362 (2006)
- 4 Under the UIGEA (§ 5362 (1) (E) (ix)), a game of fantasy sport shall have the following characteristics in order to be exempted:
- i) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organisation;
- ii) all prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest, and their value is not determined by the number of participants or the amount of any fees paid by those participants;
- iii) all winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events; and
- iV) no winning outcome is based on the score, point-spread or any performance(s) of any single real-world team or any combination of such teams, or based solely on any single performance of an individual athlete in any single real-world sporting or other event.
- 5 Humphrey vs. Viacom, Inc., U.S. Dist., Case No. 06-2768 (DMC) (D.N.J. June 19, 2007)
- 6 It is worth noting that in this particular model of fantasy sport, the participants pay a fee to purchase a fantasy sport team and the related services to manage such team, including access to statistical information, expert opinions, analysis and message boards. The participants then assemble a team using the provided services to compete against other participants over the course of a “season”. At the end of the season, the “winners” would be awarded with different prizes based on their performance (e.g. t-shirts, dolls, tvs or gift certificates). The prizes would be announced before the beginning of each season and do not depend on the number of participants or the amount of registration fees.
- 7 Getty D. (2018), Luck and the Law: Quantifying Chance in Fantasy Sports and Other Contests, Society for Industrial and Applied Mathematics Review, Vol. 60 (4), 869-887
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