RI AG: Daily Fantasy Sports Are Legal in RI

Draft Kings and FanDuel might be running into hurdles in some states, but not in Rhode Island.

The state’s attorney general has deemed daily fantasy sports sites perfectly legal in Rhode Island because they do not constitute a “game of chance” under state law.

Attorney General Peter F. Kilmartin said Thursday that he sent a letter outlining his findings in a letter to Governor Gina Raimondo, the Senate president and the Speaker of the House.

“There has been much discussion nationwide about the legality of daily fantasy sports. What has been made very clear is that state-specific laws determine the legality of these operations; what is found to be legal in one state may be found to be illegal in another state. After a very thorough review of how these sites operate and an analysis of our statutes and relevant case law, I am confident that daily fantasy sports sites are currently legal in Rhode Island,” Kilmartin said.

Rhode Island laws do not comprehensively define gambling, Kilmartin said. What is prohibited are “games of chance” and lotteries not run by the Rhode Island Lottery Commission.

A lottery by definition includes elements of chance, consideration and prize. Daily fantasy sports sites, on the other hand, include “a mixture of chance and skill,” Kilmartin said.

The state Supreme Court has set precedent to determine that the dominant factor in a game must be chance in order to fall under the prohibition, Kilmartin concl

“Under this doctrine, a scheme is a lottery ‘when an element of chance dominates the distribution of prizes, even though such a distribution is affected to some degree by the exercise of skill or judgment,’” Kilmartin wrote. “This is an especially high burden, more than the ‘substantial’ chance that the New York Supreme Court found in December 2015 when analyzing the New York Attorney General’s challenge to daily fantasy sports.”

Though daily fantasy sports sites are legal here in the Ocean State, “I believe there should be strict regulations imposed on the operation of these sites to address the issues we have experienced with gambling in Rhode Island, including infiltration of the criminal element, youth participation, and addiction issues,” Kilmartin said.

Both FanDuel and Draft Kings, the dominant players in the burgeoning online daily fantasy sports industry, have faced legal challenges in several states, including New York, where the state’s attorney general won an injunction blocking them from operating in December and filed a lawsuit that demands they pay back people who lost money and give up any money they earned in New York State.

Nevada’s gaming commission deemed both sites were gambling operations, essentially forcing them out of the state. They were declared illegal in Illinois in January after a review by their attorney general, Lisa Madigan.

Both companies have been mounting legal defenses against both New York and Illinois.