There was a time when I thought I knew was legal and illegal gambling was. Now, I have no clue. It’s fine if I’m clueless (I’m used to it), but it seems like the rest of American and even the courts are unsure. That’s a problem.

We can’t obey the rules if we can’t even agree what they are.

The reason why this all changed seems to be Daily Fantasy Sports (DFS) websites like DraftKings and FanDuel. John Oliver explains them (and the situation) in hilarious fashion here:

Before Oliver’s great video I wrote about DraftKings and FanDuel.

The confusion comes about in that there’s a carve-out of some federal gambling law (2006 Unlawful Internet Gaming Enforcement Act) that allows for fantasy sports. The idea was to enable your office to run a March Madness bracket.

Here’s a rundown from that previous article of what I think I understand about gambling.

That description makes it sound like a lottery right? You put in some money and some event churns out a winner who receives the bulk of it, with a sizable portion siphoned off for the lottery operator. Except that companies can’t operate lotteries. State laws vary, but almost all of them frown on that. The states make an exception for a few operations that give the operating back to the state to fund infrastructure.

What’s the difference? Law is just a passing interest of mine, but it seems to whether it is a game of luck or a game of skill. Games of luck are “bad.” Games of skill are “maybe okay?”

State lotteries are quite clearly games of luck. Anyone trying to claim they know which way the ping-pong balls are going to bounce is simply nuts…

This has always been interesting to me. I don’t understand why regulators would draw a line in the sand between luck and skill. It opens up a ton of issues. There are many, many cases where gambling is a combination of luck and skill.

Let’s take some casino games for example. Roulette seems to fall under luck. As a (rare) craps player, I’d say there’s some skill in making bets that gives the house the least advantage. Many argue that if you can count cards, you can even beat the house at ’21’. I’d say that counting cards is a skill and thus I could be justified in opening a ’21’ casino. Of course poker is the most obvious example. The cards you are dealt are luck, but the decisions you make after that are firmly in the skill category.

Staff writer Kosmo made a better, more succinct point:

Horse racing is unequivocally gambling, but it’s clearly not a game of pure chance. Someone who has expert knowledge is going to do far better (over the long run) betting the horses than I will. Daily Fantasy Sports is basically betting the horses, but swapping out humans for the horses.

There have been questions for some time about the legality of Daily Fantasy Sports, but they sure seem legitimate when you read the companies that have taken investments in the companies. (John Oliver points this out in his video well.)

I’m left to wonder about all other gambling. Using the casino logic above (and the fact that casinos themselves are legal in many, many states), it seems that gambling websites such as Guts would be legal too.

It seems like at some point we need a bright line to know what is illegal gambling and what is legal gambling. I’m not convinced that the difference between skill and luck is where that line should be. Maybe you can say that if anything is 100% luck it is gambling, but even then lotteries are legal, so you can’t call them illegal gambling.

This is one of the few areas where my gut isn’t telling me what is right and what is wrong. I like for people to have freedom of choice to spend their money on the entertainment they want. At the same time, I like to protect consumers from potentially harmful addictive behaviors whenever possible.

So I leave it to the readers? What do you think?