Daily Fantasy, Tipping, and Wire Fraud
Gaming Law Review & Economics 21(1) 8-17
13 Pages Posted: 15 Sep 2017
Date Written: 2017
There are apocryphal stories of a game played amongst federal prosecutors whereby the prosecutors take turns presenting their best case for bringing forth an indictment against the Pope. The vast nature of Title 18 of the U.S. Code presents plenty of crimes for participants to select. However, one version of the game prohibits a prosecutor from selecting 18 U.S.C. § 1343—the wire fraud statute—because of the vast potential applicability of the law, with even preparatory acts often falling within the statute’s purview. Indeed, a Pope was indicted in March 2009 for his role in a conspiracy to commit wire fraud. Getzendanner noted: “[t]he mail and wire fraud statutes enable the federal government to prosecute virtually anyone who uses either of the ubiquitous means in furtherance of a fraudulent scheme.” The primary restrictions on the use of mail fraud and wire fraud are a combination of lack of resources and prosecutorial discretion.
Through the late 1980s, the scope of potential liability under both wire fraud and mail fraud expanded. However, the expansion into incorporation of certain intangible rights under the statute has received criticism, including the argument that the scope of the statute allows for “federal involvement of matters of little federal concern.” The broad nature of the wire fraud and mail fraud statutes make the law potentially applicable to a wide variety of instances, including the possible application to employees and/or executives of major daily fantasy sports (DFS) companies such as FanDuel and DraftKings. We analyze the wire fraud statute and so-called “tipping”—gaining access to, or the provision of, non-public information—that may be helpful in winning DFS contests.
Keywords: Wire fraud, daily fantasy sports, sports gambling, corruption, securities, tipping, financial crimes
JEL Classification: K00, K10, K14, K33, K40, K49, L50, L59, L63, L80, L83, L86, L89, O34
Suggested Citation: Suggested Citation