Daily fantasy sports sites Draft Kings, Fan Duel illegal or legal? Is it gambling?

Hours after what was the biggest day in the history of daily fantasy sports, Week 1 of the 2015 NFL season, killjoyDebbie Downer U.S. Representative Frank Pallone -from New Jersey’s Sixth Congressional District – greased the railroad tracks on DraftKings and FanDuel’sgravy train.

On the website for the Committee on Energy & Commerce, an ominous press release was posted with the title,”Pallone: ‘How do fantasy sports differ from gambling?'”

Read the entire press release here

It goes on to say that Pallone has “requested that the Committee hold a hearing to review the legal status of fantasy sports, given the Committee’s jurisdiction over professional sports and gambling and the overwhelming popularity of fantasy sports websites.”

Translation: Way too many people are having way too much fun and are making way to much money.

“Fans are currently allowed to risk money on the performance of an individual player. How is that different than wagering money on the outcome of a game?,” said Pallone in the statement.

The statement also questions the relationships between the daily fantasy sites and the NFL, NBA, MLB and NHL.

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“Involvement of players or league personnel who may be able to affect the outcome of a game also raises additional questions about the relationship between the entities, especially when professional leagues often actively promote fantasy sites, like DraftKings or FanDuel,” the statement said.

As Metro highlighted in a piece on daily fantasy sports last year, sites like DraftKings and FanDuel are legal because the Unlawful Internet Gambling Enforcement Act of 2006 excludes fantasy sports that meet specific requirements.

“We don’t even consider it a loophole. That’s a matter of debate, a subjective argument,” said DraftKings VP of communications Femi Wasserman at the time.“We don’t stay up at night worrying about regulators eventually ‘catching up.’ We’re planning on being here. We view ourselves as a start-up and we’re on a typical start-up curve. We believe that what we do is legal and we believe that our customers love fantasy sports, first and foremost.”

But for the first time, a prominent regulator is taking notice. Ironically, it could be the amount of commercials by DraftKings and FanDuel that were displayed throughout the first weekend of 2015 NFL action that could eventually spell doom for daily fantasy.

Pallonehas pushed for legal sports gambling in New Jersey in the past.

“We know that sports betting is occurring without regulation and that the revenues from it are going to illegal enterprises rather than businesses in New Jersey, like our casinos and racetracks. It is time to bring this activity out of the shadows and allow states to regulate it,” Pallonesaid, according to Casino.org.