Fantasy Sports - Game Vs. Gambling from Thai Law Perspective

FANTASY SPORTS - GAME VS. GAMBLING FROM THAI LAW PERSPECTIVE

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 Whether Fantasy Sport Would Be Considered as Gambling Prohibited by The Gambling Act of 1935 Or A Game of Skills Operatable Under the Law

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 would earn points or scores based on the performance of the players within their teams, then, the points earned by each participant would be compared 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 sports betting where the participants would choose the team to bet on in a particular match and if such a 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 sports betting, namely, the fact that the participants must choose and assemble their own virtual teams from players competing in a tournament, as opposed to simply pick and choose a team that is likely to win in a particular match. As such, fantasy sport is viewed by some as a competition or a game involving the contest of analytical skills of participants to pick and choose each and every player in their team, rather than gambling in which the outcome is mostly based on chance and sheer luck of the participants.

From the Thai law perspective, various forms of gambling are prohibited by the Gambling Act of 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 assets where there is a chance for the participants to gain money or other benefits based on their luck, rather than their skill or competency. Since 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 other methods used instead of an entrance fee which may be brought with money), for a chance to gain money or other prizes if they win the game, whether a typical game of fantasy sport would be considered as gambling under Thai law would eventually depend on whether the chance of winning is based upon participants' luck or their skills and competency.

Currently in Thailand, it is still debatable whether the chance of winning in a game of fantasy sport is based upon the participants' skills and competency primarily. However, we can examine various examples from the United States in an attempt to tackle this issue. The Unlawful Internet Gambling Enforcement Act of 2006 of the United States (the "UIGEA") (i.e. an act governing online betting and wagering), in an attempt to resolve this issue, 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 seem to emphasize that a game of fantasy sports, which is not considered as a bet or a wager, should be a game of skills of the participant rather than luck. The method of the UIGEA in tackling this issue is to exempt certain models of the game where the winner of the game is decided by the skills of the participants. However, based on the UIGEA alone, it is uncertain whether a typical game of fantasy sport is considered under the law to involve the skills of the participants or not.

In the case of Humphrey v. Viacom, Inc.,⁵ the United States District Court of New Jersey stipulates in its finding that the entry fees for fantasy sports are not "bets" or "wagers" because (i) such fees are paid unconditionally, (ii) the prizes offered to fantasy sports participants are for amounts certain and are guaranteed to be awarded, and (iii) participants do not compete for the prizes. Additionally, the winning participants are not "winners" as a matter of law, but parties to an enforceable contract, whereby the organizer provides administration to an online event and statistical and analytical services, and the participants provide entry fees for such event and services. This judgment indicates that fantasy sport (of this particular model) cannot be considered as illegal gambling as 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 since the entry fee is considered as a one-time, non-refundable fee in exchange for administrative, statistical and analytical services).⁶ The judgment also indicates that the winning outcome of the fantasy sport, in this case, reflects the knowledge and skill of the participants through the Court's interpretation of the UIGEA to dismiss the case.

From an academic point of view, a recent study in 2018⁷ has concluded, based on statistical data of the participants, that participants who are experienced in the game have more 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 skills rather than chance. However, since there is relatively less research carried out on this topic, further studies may be needed to concretely 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 whether fantasy sport would be considered as gambling prohibited by the Act or a game of skills operatable under the law. However, without specific permission for the game (or its variants) under the law similar to the UIGEA, an official ruling addressing this matter or judgments 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 potential violation of the law.

Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.