West Virginia's top law Enforcement Officer has Doubts on Legality of Daily Fantasy Sports

A new opinion from a prominent state attorney general concludes that the legality of some daily fantasy sports (DFS) products is legally murky and complicated.

The analysis came at the request of West Virginia House Speaker Roger Hanshaw, who asked Attorney General JB McCuskey to determine if certain games offered by operators like PrizePicks constituted illegal sports betting.

McCuskey’s response highlights a major legal gray area for the industry in a state grappling with expansion and regulation of gaming.

Daily Fantasy Sports have been available across the United States for nearly two decades. With the rapid growth of sports betting and online casinos, as well as sweepstakes casinos, gaming like Daily Fantasy Sports has often been overlooked. But recently, scrutiny has focused on DFS in several states, including California where the Attorney General issued an opinion that such products are outside legal gaming in that state.

Online DFS: A Legal Catch-22

At the heart of the issue is a conflict in state law. McCuskey noted that on the surface, PrizePicks's former single-player games, which used terms like "entry fee" instead of "wager," were "substantively the same" as sports betting parlays.

The West Virginia Lottery Sports Wagering Act, passed in 2018, explicitly excludes daily fantasy sports from its definition of legal sports betting. The problem is that the act never actually defines what DFS is.

This creates a catch-22. McCuskey questioned whether the state Lottery Commission even has the authority to create rules or definitions for DFS, since the legislature specifically excluded it from the sports wagering law.

This isn't the first time the state has examined the issue. A 2016 opinion from the attorney general's office in West Virginia was rooted in a bill that was never signed into law, making its analysis outdated.

Now, DFS is being poked at again, at a time when social casinos and sweepstakes casinos are under attack in many states for being illegal gaming.

That old opinion was a key part of a cease and desist letter the lottery sent PrizePicks in 2022. McCuskey’s new review now describes that letter as "legally dubious" because it relied on a bill that never became law.

The current legal uncertainty affects products that PrizePicks no longer even offers in the state. The company has since switched to its peer-to-peer Arena game in West Virginia.

With his office's hands tied by the lack of a clear West Virginia gaming statute on DFS sites, McCuskey offered one straightforward solution to fix the confusion.

He recommended that the state legislature pass a new bill that clearly and legally defines daily fantasy sports. Barring that, the legal limbo will continue.

Despite the ambiguous findings of regulators in WV, PrizePicks viewed the outcome favorably. A spokesperson said the company was grateful for the "detailed analysis, which confirms that we have always operated legally in West Virginia." Keep up with the latest news in our Ballislife Play section.

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