DOVER, Del. (Legal Newsline) — The Delaware Department of Justice has notified DraftKings Inc., FanDuel Inc. and Yahoo! Inc. that state law disallows their respective online fantasy sports activities. The department asked the organizations to add Delaware to their lists of states in which players are not legally permitted to win monetary prizes.
As with other states that have banned paid online fantasy sports, the key is that these games involve “chance” and are not entirely based on skill, the state said. Contestants select the players and teams, but have no role in how the teams actually perform. Online fantasy sports are therefore lotteries under the law, the state said, and the Delaware Constitution generally prohibits gambling in the state, except “lotteries under state control.”
Although House Bill 444 could make changes to state law in the future, the Department of Justice must enforce the current rules, the state said and the Department will not put a stop to contests that have no requirement of payment for participation or the possibility of a monetary reward.
The Department of Justice sent formal notice to the companies July 7.