The daily fantasy sites DraftKings and FanDuel made news this week when reports surfaced that employees might have had access to information not normally released to the public and then used it to their advantage when entering tournaments. This raised fresh questions about the legality of these sites, which critics contend are a form of gambling, even though they are exempt under federal law.
Here are answers to some of the many questions surrounding the case:
What is fantasy football?
Fantasy football has been around for years. By one estimate, 31 million Americans play. The primary format is for players to choose a roster that competes for points, based on the athletes' actual performance in games, over the course of an entire season. Most games are free to enter and any prize money is awarded ad hoc by the participants, similar to an office pool.
In recent years, though, online daily fantasy games have emerged. In these games, players pick new rosters every day or week. Websites like DraftKings and FanDuel, the two most popular ones, charge an entry fee, from 25 cents to $1,000, to play against perhaps hundreds of opponents, and prize pools can grow so large that winners can earn $2 million, according to the companies.
Everybody knows who the good players are. Wouldn't my roster look like everybody else's, full of stars?
Some fantasy picks are entirely obvious. Given the choice, most players would love to have Green Bay Packers quarterback Aaron Rodgers or Detroit Lions wide receiver Calvin Johnson on their teams.
But to win fantasy pools, players need one or two undervalued players who have standout seasons. This year, Atlanta Falcons running back Devonta Freeman is perhaps the biggest surprise. After a lackluster rookie season in which he scored two touchdowns, Freeman has already rushed for seven scores this year. Fantasy players who make these unsung picks boost their chances to win because they can earn more points, much like low-priced stock that performs better than the market expected. Sure, Apple shares (Rodgers) are great, but the big winnings can come from diamonds in the rough (Freeman).
Also, daily fantasy players have a pool of theoretical money to "buy" players, based on predetermined salaries, giving an incentive to balance a team between high-dollar athletes and less expensive ones.
Is it gambling?
Under federal law, fantasy sports are not considered gambling. In 2006, legislators banned online poker and other Internet gambling but gave fantasy sports an exemption. They decided, under heavy lobbying from sports leagues, that fantasy games were based largely on skill, not chance. But the exemption was made when season-long fantasy games with small prizes dominated, not the daily fantasy games that later emerged and claim big rewards.
Lawmakers are starting to look at whether daily fantasy games have pushed the boundaries of that exemption. Some critics contend daily fantasy games are a form of gambling and should be banned or regulated. Others, including lawmakers in New Jersey, point to daily fantasy as evidence that sports betting should be made legal across the country, not just in Las Vegas.
Why do I see so many commercials for it now?
DraftKings, FanDuel and other daily fantasy sites have raised hundreds of millions of dollars from investors and are bombarding television viewers with advertisements. They have also signed partnerships with Major League Baseball, the NBA and the NHL as well as dozens of teams, and they are backed by several media companies.
The NFL as a league supports the less flashy season-long fantasy games but has opposed sports betting, essentially including the newly popular daily fantasy games in that category. But many individual teams and their owners encourage it and have invested in FanDuel and DraftKings. The league has done nothing to stop them.
The fantasy leagues are trying to gather as many customers as possible so that if sports betting is legalized, they will be the preferred destination. Although the companies make little or no profits, they are worth billions of dollars on paper.
How secure are my picks? Is there a regulator?
No agency regulates these sites, which has given them a Wild West feel.
This week, DraftKings and FanDuel had to issue statements to defend their integrity after it was revealed that some of their data was inadvertently released and there were allegations that some of their employees were placing bets on that information.
The companies' claims of large payouts have been difficult to verify because they do not regularly release lists of winners.
I read some information was leaked. What happened and why was that a big deal?
The leaked data described how many entrants in a particular contest chose each NFL player. In theory, this would have allowed the employees to select players who were not as popular, giving them a chance at winning a bigger piece of the pool.
Why is selecting less popular players so important?
Finishing in the top half or top third of a daily fantasy contest does not do you much good. The big prizes go to the finishers at the very top. It's hard to get there without selecting some players whom few other entrants have chosen but perform well.
Are there fantasy leagues for all sports?
There are fantasy sports leagues for baseball, soccer and many other sports. But fantasy football, like the NFL itself, is far and away the most popular.