A Fantasy Sports Opinion Letter Is A Necessity

The fantasy sports market was valued at $30.5 billion in 2023. Every year,
the industry inches closer to nationwide legalization and
regulation. In addition to state law amendments, federal laws and state common law
interpretations of existing gambling and lottery laws pave the way
forward for the continued expansion of the fantasy sports industry.
In addition to ensuring compliance with state and federal
regulations, companies need to prioritize obtaining a fantasy
sports opinion letter from an experienced law firm before entering
the market.

Start With a Fantasy Sports Opinion Letter

Obtaining a fantasy sports opinion letter from a qualified law
firm is a prerequisite to payment processors accepting
fantasy sports operators as clients. Banks, credit card
companies, and payment processors alike require that daily fantasy
sports businesses obtain a fantasy sports opinion letter from a law
firm with knowledge and expertise in the fantasy sports and gaming
space. The opinion letter will detail that, upon a review of the
subject fantasy sports operator’s business practices, the
operator adheres to the many federal and state requirements that
apply to its fantasy sports offerings.

What Information Should a Fantasy Sports Opinion Letter
Include?

The content of a fantasy sports opinion letter will vary on a
case by case basis. However, most payment processors require that
opinion letters include:

• Specific details regarding the gameplay parameters of the daily
  fantasy sports operator’s offerings;




• Whether the contest design, fee structure, prize payouts and
  other features of the subject fantasy sports contests comply with
  applicable state and federal law;




• Whether the fantasy sports offerings cannot be provided to
  residents of certain states because of noncompliance with said
  states’ regulations; and




• Whether or not the subject fantasy sports offerings comply with
  applicable federal laws, such as, the 2006 Unlawful Internet Gambling Enforcement Act
  (“UIGEA”), the Interstate Wire Act (the “Wire
  Act”), the Professional and Amateur Sports Protection Act
  (“PASPA”), the Federal Antigambling Statute (the
  “Gambling Act”) and the Travel Act.

Retain a Fantasy Sports Lawyer to Draft Your Opinion
Letter

Fantasy sports operations cannot function without bank, credit
card and payment processing services. To retain these services,
each fantasy sports operator must demonstrate compliance with
applicable state and federal regulations by presenting a fantasy
sports opinion letter from a law firm that practices in the field.
As part of the process, law firms that focus on fantasy sports law
will, among other things, evaluate operator game models, craft
contest rules, and review marketing collateral and customer
registration processes. Once all of the foregoing are determined to
be in order, the fantasy sports attorneys can proceed with
preparing a comprehensive opinion letter for submission to payment
processors.

Please note that this is only a brief overview of some of the
legal issues surrounding daily fantasy sports and the opinion
letters required to obtain payment processing services.

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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.