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Fantasy sports in Australia: co-regulation and commercial accommodation

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Abstract

Modern, commercial fantasy sports came to Australia in 2001. It has since grown into a significant and accepted part of the Australian sporting and gambling landscape. Fantasy sports’ mainstreaming has been relatively uncontroversial. It has found its place within Australia’s regulatory regimes absent the controversy and disputes that has plagued it in the USA. Its operators have been licensed and there have been no significant challenges to the products they offer. This is not to say that fantasy sports are without their regulatory and legal issues in Australia. On the contrary, such issues abound. These range from how fantasy sports should be regulated and its integrity ensured, to the nature, ownership and protection of the intellectual property and other rights upon which fantasy sports depend for their success. This article explores these issues and the manner of their resolution. This examination reveals a regulatory environment that anoints sport governing bodies as co-or quasi-regulators of gambling on the sports they administer, which position they have leveraged to reach commercial accommodations with fantasy sport operators, thereby creating a stable environment in which both share in the revenues it generates.

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Notes

  1. See Part 2 for a discussion of the emergence and evolution of fantasy sports in Australia.

  2. Zakus et al. 2011, p. 158.

  3. Sport Australia, AusPlay Survey (2019). https://www.clearinghouseforsport.gov.au/research/ausplay/results. Accessed 24 October 2020.

  4. Roy Morgan, Olympics top TV sport ahead of AFL, Comm. Games & Cricket, 2 March 2018. http://www.roymorgan.com/findings/7508-top-sport-tv-viewing-december-2017-201803020101#:~:text=Sport%20is%20well%2Dknown%20as,Helix%20Personas%20communities%2C%20however%20different. Accessed 24 October 2020.

  5. Australian Bureau of Statistics, 4156.0 - Sports and Physical Recreation: A Statistical Overview, 2011. https://www.abs.gov.au/ausstats/abs@.nsf/Products/DA94EFEC70281F10CA25796B001518B9?opendocument. Accessed 24 October 2020.

  6. Letts S, Chart of the day: Are Australians the world's biggest gambling losers? You can bet on it, ABC News (online), 20 November 2018, reporting on research by UK-based global gambling analysts H2 Gambling Capital. https://www.abc.net.au/news/2018-11-20/australians-worlds-biggest-gambling-losers/10495566?nw=0. Accessed 24 October 2020.

  7. Australian Institute of Family Studies, Gambling Activity in Australia: Findings from Wave 15 of the Household, Income and Labour Dynamics in Australia (HILDA) Survey (Research Report – November 2017). https://aifs.gov.au/agrc/publications/gambling-activity-australia/2-gambling-participation. Accessed 26 October 2020. Sports betting is defined to include wagering on approved local, national and international sporting activities and established forms of horse and greyhound racing. There is no separate data for fantasy sports betting. The main forms of gambling in Australia are lotteries, instant scratch tickets and electronic gaming machines.

  8. Queensland Government Statistician's Office, Queensland Treasury, Australian Gambling Statistics, 35th edition. 2019, Summary Table D (at p. 4). https://www.qgso.qld.gov.au/statistics/theme/society/gambling/australian-gambling-statistics. Accessed 26 October 2020.

  9. In the USA, courts have been called upon to rule on issues covering fantasy sports use of players’ statistical data (e.g. C.B.C. Distribution and Marketing, Inc v Major League Baseball Advanced Media LP, 505 F.3d (8th Cir. 2007)); the patentability of its underlying technology (e.g. Fantasy Sports Properties, Inc v ESPN/Starwave Partners, 287 F.3d 1111 (Fed Cir 2002)); and whether fantasy sports ought be characterised as gambling (e.g. People v Fanduel, Inc, No 453056/15 (NY Sup. Ct, Dec. 11 2015)).

  10. See e.g. Davidson 2002; Roberts 2007; Edelman 2012; Kaburakis et al. 2014; Greene 2016.

  11. Fan Footy, A short history of fantasy Aussie Rules football. http://www.fanfooty.com.au/blog/a-short-history-of-fantasy-aussie-rules-football/. Accessed 28 February 2021.

  12. Ibid.

  13. See the AFL Fantasy website - https://fantasy.afl.com.au/. Australia’s second largest code, the National Rugby League (NRL) similarly hosts NRL Fantasy on its website for which it is the promoter – see https://fantasy.nrl.com/. A company called Fan Hub Pty Ltd operates both competitions on behalf of their respective promoters.

  14. Fan Footy, Around the outside: 2017/18 Australian fantasy industry update, 18 April 2018. http://www.fanfooty.com.au/blog/around-the-outside-201718-australian-fantasy-industry-update/. Accessed 18 September 2020.

  15. Cooper A, Fantasy sports enjoy very real growth’ The Age (online), 27 March 2012. https://www.theage.com.au/business/small-business/fantasy-sports-enjoy-very-real-growth-20120327-1vvvd.html. Accessed 21 September 2020.

  16. Ibid.

  17. See the SuperCoach website - https://supercoach.dailytelegraph.com.au/terms-conditions#NRLClassic. Accessed 21 September 2020.

  18. Fan Footy, Around the outside, above n 14.

  19. Ibid.

  20. DraftDay Gaming Group, Inc, DraftDay Gaming Group, Inc. Partners with Draftstars to Launch Australia’s Premier Daily Fantasy Sports Site, Media Release, 31 March 2016. https://www.legalsportsreport.com/wp-content/uploads/2016/04/DraftDay.pdf. Accessed 22 September 2020.

  21. State and territory gambling laws differ. Space does not permit (nor does the article’s purpose call for) a forensic analysis of these laws and the differences between them. Discussion in this section is by reference to the Northern Territory’s Racing and Betting Act 1983 - it being the jurisdiction where all fantasy sport operators are licensed. Comparative references also are made to the Victorian Gambling Regulation Act 2003.

  22. Muralee Das, Fantasy Sports and Gambling Regulation in the Asia-Pacific, The International Sports Law Journal (forthcoming).

  23. See e.g. Victorian Commission for Gambling and Liquor Regulation, Trade Promotion lotteries. https://www.vcglr.vic.gov.au/gambling/lotteries/trade-promotion-lotteries/about-trade-promotion-lotteries#:~:text=Trade%20promotion%20lotteries%20are%20designed,of%20chance%20at%20any%20stage. Accessed 8 November 2020.

  24. Interactive Gambling Act 2001 (Cth), in particular ss 5(3) and 8BB.

  25. Lotteries and Art Unions Act 1901 (NSW), s 4B; Lotteries Act 1964 (ACT).

  26. Gambling Regulation Act 2003 (Vic), Ch 5, Part 7; Gaming and Wagering Commission Act 1987 (WA), s 102.

  27. Interactive Gambling Act 2001 (Cth), in particular ss 15AA(3), 8E, 8A and 5(3).

  28. A list of approved sport betting providers licensed in the Northern Territory can be found at https://justice.nt.gov.au/regulatory-services/licensing-boards-committees-and-advisory-councils/racing-commission/sports-bookmakers-and-betting-exchange-operators. Accessed 22 September 2020. Being licensed to provide gambling services in one state or territory generally allows the licensee to offer its services to residents of other states and territories (Betfair Pty Limited v Western Australia (2008) 234 CLR 418).

  29. A list of declared events under the Northern Territory Racing and Betting Act 1983 can be found at https://nt.gov.au/industry/gambling/licences/bookmaker-licences-and-permits/declared-sporting-events-for-bookmaking. Accessed 22 September 2020. For a list of declared sporting events under the Victorian Gambling Regulation Act 2003 see -https://www.vcglr.vic.gov.au/gambling/wagering-and-sports-betting/about-wagering-and-sports-betting/approved-betting-events.

  30. Racing and Betting Act 1983 (NT), ss 69A-F. See also the Gambling Regulation Act 2003 (Vic) Ch 4, Part 5, Div. 5 that provides that a sports betting provider must not offer a betting service on a sports event unless it has an agreement with the sports controlling body for that event. Limited exceptions exist.

  31. Racing and Betting Act 1983 (NT), s 69C. See also Gambling Regulation Act 2003 (Vic), s 4.5.23.

  32. Kaburakis et al. 2014, p. 30.

  33. Like all competitive endeavours, fantasy sports face integrity issues. However, because fantasy sports aggregate the playing statistics of individual players from different teams playing in multiple games, being able to corrupt player performances in sufficient number to fix or manipulate the outcome of a fantasy sport contest appears very unlikely. Some commentators have gone so far as saying “it seems infeasible to fix a fantasy game involving a group of real players who are on multiple teams” (Schrotenboer B, Leagues See Real Benefits in Daily Fantasy Sports, USA Today Sports, 1 January 2015. https://www.usatoday.com/story/sports/2015/01/01/daily-fantasy-sports-gambling-fanduel-draftkings-nba-nfl-mlb-nhl/21165279/. Accessed 7 November 2020. The greater risk to the integrity of fantasy sports comes from insider trading-type activity where persons enter competitions aided by non-public information obtained from persons associated with the fantasy sports industry. See generally Jessop 2008.

  34. For a description of pre-Internet fantasy sports, see Edelman 2012, pp. 4-9.

  35. Patents Act 1990 (Cth). With respect to computer programs specifically, see International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR 218; CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260.

  36. Copyright Act 1968 (Cth). See s 10 that defines ‘literary work’ to include a computer program, and an electronic compilation such as a database.

  37. See generally Optus Networks Pty Ltd v Telstra Corp Ltd (2010) 265 ALR 281; Williams 2019.

  38. IP Australia, Patents for computer-related inventions - https://www.ipaustralia.gov.au/patents/understanding-patents/types-patents#innovation; Patents for computer implemented inventions (software patents) - https://www.ipaustralia.gov.au/ip-for-digital-business/idea/software-patents. Accessed 24 October 2020.

  39. IP Australia, Patents for computer implemented inventions (software patents) - https://www.ipaustralia.gov.au/ip-for-digital-business/idea/software-patents. Accessed 24 October 2020.

  40. See Little 2016.

  41. A search for ‘fantasy sports or gaming’ on Australia’s Patent Register on 24 October 2020 revealed 18 patent applications have been filed for inventions related to fantasy sports systems and methods, five of which are pending decisions.

  42. Victoria Park Racing & Recreational Grounds Co Ltd v Taylor (1937) 58 CLR 479.

  43. Smith 2012, p. 2.

  44. IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458, 472 [28].

  45. Copyright Act 1968 (Cth), s 32. See also s 10 that defines ‘literary work’ to include a ‘table, or compilation, expressed in words, figures or symbols’.

  46. Victoria Park Racing & Recreational Grounds Co Ltd v Taylor (1937) 58 CLR 479, 511. See also IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458, 474 [38].

  47. Telstra Corporation Ltd v Phone Directories Co. Pty Ltd (2010) 194 FCR 142; IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458. For a discussion of these cases and ‘originality’ generally, see Davison et al. 2020, pp. 67-74.

  48. (2010) 194 FCR 142, 174 [104].

  49. Victoria Park Racing & Recreational Grounds Co Ltd v Taylor (1937) 58 CLR 479 with respect to names and numbers of horses appearing on the results board of a race course; IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 with respect to the titles of television programs and the dates and times of their broadcast in a television program guide; Telstra Corp Ltd v Phone Directories Company Pty Ltd [2010] FCA 44 with respect to alphabetical listings in a telephone directory.

  50. IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458, 477 [42].

  51. (2014) 107 IPR [75]-[77]. This was an application for an interlocutory injunction brought by Sports Data, the NRL’s previous official supplier of statistical data, alleging Prozone Sports Australia, the NRL’s new official supplier of statistical data, had infringed its copyright by copying the data template and input criteria it had developed when the NRL’s official supplier. The application was rejected because the judge concluded there was insufficient objective similarity between the two works to conclude that Sports Data’s work had been reproduced.

  52. Other than by making agreeing not to do so a term and condition of entry to the event, but this is unlikely to be effective in practice as compiling data can be done via watching broadcasts of the event.

  53. Feist Publications Inc v Rural Telephone Service Co Inc 499 US 340 (1991) at [11]-[19] per O’Conner J, cited in Smith 2012, p. 5.

  54. Not included in this list is ‘image rights’. In Australia, there is no legally recognised ‘image right’ and protection of a celebrity’s image is not a specific cause of action.

  55. Australian Consumer Law, s 18. The Australian Consumer Law is Schedule 2 of the Competition and Consumer Act 2010 (Cth). See generally Thorpe et al. 2017, pp. 659-675.

  56. Australian Consumer Law, s 29(g) and (h).

  57. To establish passing off, three elements must be established: reputation; misrepresentation; and damage. See generally Thorpe et al. 2017, pp. 675-680.

  58. Wickham v Associated Pool Builders Pty Ltd (1988) 12 IPR 567.Wicham’s claim succeeded under the predecessor provisions to the Australian cosumer law but failed under passing off because, at the time, for passing off to be made out both parties needed to be engaged in a common field of activity. The common field of activity test has since been dispensed with.

  59. Talmax Pty Ltd v Telstra Corporation Ltd [1997] 2 Qd R 444. This case should be contrasted with the unsuccessful action brought by Australian Olympic Games long-jumper Gary Honey in Honey v Australian Airlines Ltd ((1989) 14 IPR 264). In that case, the Court held that posters promoting and encouraging sport participation bearing both the name and photo of Honey and the name and logo of the airline (that was the participation program’s sponsor) did not misrepresent there was a commercial association between Honey and the airline. See Thorpe et al. 2017, pp. 659-680 for other examples.

  60. Cherny D, AFL players unlikely to follow NFL player's lead with lawsuit against fantasy sports site, says legal expert, The Age (online), 4 November 2015. https://www.theage.com.au/sport/afl/afl-players-unlikely-to-follow-nfl-players-lead-with-lawsuit-against-fantasy-sports-site-says-legal-expert-20151104-gkqmte.html. Accessed 19 September 2020.

  61. Trade Marks Act 1995 (Cth), s 17. A ‘sign’ is defined to include a letter, word, name, signature, numeral, device, brand, label, shape, colour or scent, individually or in combination (s 6).

  62. Trade Marks Act 1995 (Cth), s 120.

  63. Trade Marks Act 1995 (Cth), s 122(1)(c); Nokia Corporation v Mai (2013) 59 IPR 413, 424 [46].

  64. Dwyer and Drayer 2010, p. 207; Smith 2012, p. 2.

  65. The AFL currently has 301 registered trade marks; the Australian Rugby League Commission (the NRL’s governing body) has 124 registered trade marks. Search of the Australian Trade Marks Register, conducted 7 November 2020.

  66. Warne v Genex Corporation Pty Ltd (1996) 35 IPR 284.

  67. See discussion in Sect. 3.3 at ns 46-51.

  68. Australia’s uniform defamation laws contain a general prohibition on corporations suing for defamation unless they are an ‘excluded corporation’ (see e.g. Defamation Act 2005 (Vic), s 9). ‘Excluded corporation’ is defined to mean corporations whose objects do not include obtaining financial gain for its members or that employ fewer than 10 persons. Many Australian sporting organisations are not-for-profit and may fall within the definition of ‘excluded corporation’ entitling them to sue for defamation. A company that does not fall within the definition of an excluded corporation can bring a claim for injurious falsehood. However, injurious falsehood is generally harder to prove requiring that a false statement concerning the company’s goods or business be made with malice (Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388).

  69. Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460; Harbour Radio Pty Ltd v Trad (2012) 247 CLR 31.

  70. [1930] 1 KB 467.

  71. This was the conclusion of a 2012 review of the Interactive Gambling Act (Australian Government, Department of Broadband, Communications and the Digital Economy, Review of the Interactive Gambling Act 2001, Final Report 2012, 155), a conclusion not disturbed by a 2015 review of illegal offshore wagering (Commonwealth of Australia, Department of Social Services, Review of Illegal Offshore Wagering, Report to the Ministers for Social Services and the Minister for Communication and the Arts by Lead Reviewer, the Hon. Barry O’Farrell, 2015).

  72. In the USA, two conceptions of fantasy sports compete in the debate about their legality: (1) that compiling a fantasy sport team and, therefore, succeeding in fantasy sport competitions is predominately an exercise of skill; and (2) that succeeding in fantasy sport competitions is predominately the result of chance, largely determined by factors outside of players’ control. See e.g. Getty et al. 2018; Das 2018, pp. 99-103; Scott (2017).

  73. Hodge 2013, p. 9.

  74. Black 2008, p. 141. See also Black 2001; and Parker 2008 who describes the ‘pluralisation of regulation’.

  75. Gunningham and Grabosky 1998, p. 15. See also Grabosky 2013.

  76. Freiberg 2010. For other taxonomies of regulatory tools, see Salamon 2002; Windholz 2018, pp. 170-82.

  77. Levi-Faur 2005. See also Braithwaite 2008.

  78. Minogue and Carino 2006. See also Levi-Faur 2011.

  79. Windholz 2018, p 27.

  80. See Sect. 3.1 at ns 30-33.

  81. Windholz 2018, p. 164-5.

  82. See e.g. Deans et al. 2017; Sartori et al. 2018; Rowe D, Live odds ban debate exposes sport and gambling’s uncomfortable mutual dependency, The Conversation, 8 May 2017. https://theconversation.com/live-odds-ban-debate-exposes-sport-and-gamblings-uncomfortable-mutual-dependency-76514. Accessed 8 November 2010.

  83. See e.g. Livingstone C, Who pays the price when sporting codes embrace the bookies, The Lens, 14 August 2020. https://lens.monash.edu/@politics-society/2020/08/14/1381051/who-pays-the-price-when-sporting-codes-embrace-the-bookies. Accessed 5 November 2020; Sartori et al. 2018. Fantasy sports, like all forms of gambling, impose societal costs. These include the costs to government of regulating gambling and providing support services to adversely affected gamblers, lost productivity and other work-related costs, and the costs of crime, including to businesses and the justice system (Productivity Commission, Gambling, Report No. 50 (2010)). Daily fantasy sports possess structural and situational characteristics that have been found to make other gambling products more risky, most relevantly having a high event frequency – that is, a short timeframe between placing a bet and receiving results. On the other hand, it has been suggested that the key motivations for participating in fantasy sports - socialising, entertainment and competition (rather than gambling to win money) - may serve as a protective buffer from the harms associated with excessive gambling (Pickering et al. 2017).

  84. See e.g. Niall J, AFL boss defends betting deal, says no timeline on his exit, The Age (online), 1 March 2020. https://www.theage.com.au/sport/afl/afl-boss-defends-betting-deal-says-no-timeline-on-his-exit-20200301-p545tl.html. Accessed 8 November 2020.

  85. Sartori et al. 2018; Cross N, Keane D, Does the AFL need to look at whether it has a gambling problem?, ABC News (online), 21 June 2019. https://www.abc.net.au/news/2019-06-21/does-the-afl-have-a-gambling-problem/11172630. Accessed 5 November 2020.

  86. See, for example, the Collective Bargaining Agreement between the AFL and the AFL Players’ Association, especially clauses 1, 10, 21.2, 26 and Schedule D - http://www.aflplayers.com.au/cba/. Accessed 29 October 2020.

  87. The NRL’s contracted statistician, Prozone Sports Australia Pty Ltd, provides data to the NRL’s Fantasy site, Nationwide News’ NRL SuperCoach site and the NRL-based daily fantasy sport competitions conducted by Draftstars and Moneyball.

  88. Kaburakis et al. 2014, p. 27.

  89. Kaburakis et al. 2014, p. 38.

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I would like to thank Jarryd Shaw for his research assistance in preparing this article.

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    Eric L. Windholz

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Windholz, E.L. Fantasy sports in Australia: co-regulation and commercial accommodation. Int Sports Law J 21, 154–165 (2021). https://doi.org/10.1007/s40318-021-00187-x

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