1. Are fantasy sports legal?
a. Yes. Playing fantasy sports games for free is legal everywhere in the U.S. If you play in a game where you have to pay money for the chance to win a prize—Pay Leagues—then legality depends on where you live. On the federal level, the Unlawful Internet Gambling Enforcement Act of 2006 created a “carve out” that recognizes fantasy sports Pay Leagues as legal games of skill. While legal under federal law, fantasy sports Pay Leagues are treated different on a state-by-state basis. Some states do not allow games like fantasy sports Pay Leagues regardless of how much skill is involved and some states have enacted legislation forbidding fantasy sports Pay Leagues. Meanwhile, the majority of states have laws that recognize fantasy Pay Leagues as legal, and others have implemented licensing processes with fees that make it burdensome for newcomers to the industry to compete in these states. Finally, many states have yet to enact legislation protecting fantasy sports. YouRulz works hard to ensure compliance with the laws of each state. We have implemented many tools, such as Geo-Location tracking, to help ensure compliance. If you attempt to sign up for a Pay League but live in or are currently located in a state where it is not allowed, you will not be able to complete the signup process. We apologize for this inconvenience.
b. Some states still do not recognize fantasy sports as a game of skill as laid out in federal law by the Unlawful Internet Gambling Enforcement Act of 2006. If you live in one of the following states, we encourage you to reach out to your state legislators and demand change. Below is a list of states and a link to their respective legislative websites:
c. In addition, many states have implemented legislation that requires licensing, and several of these states have put into effect licensing fees and processes that prevent startup organizations from being able to offer these features in the state. Some states, like New York, have implemented laws requiring registration, but the registration process is not yet available, leaving many operators unable to register and only allowing grandfathered operators to operate in the state. However, states like Colorado have implemented a simple registration process for new and small operators, which allowed YouRulz to successfully obtain the required license. If you live in one of the following states, we encourage you to reach out to your state legislators and demand change:
d. If your state was not listed above, we still encourage you to speak to your legislators. Demand protection for fantasy sports with little or no licensing fees. This will help ensure we can continue to offer these great features to you. Several states currently have conflicting opinions and while we currently offer Pay Leagues in these states, it is important that you reach out to your legislators and demand they protect your rights to play fantasy games. These states include the following:
2. What can I do if Pay Leagues are not available where I live?
a. If Pay Leagues are not available where you live, please review items 1.b. and 1.c. above and follow the link to contact your state’s legislators. Let them know that they need to revise the laws in your state to allow fantasy sports and better align with the Unlawful Internet Gambling Enforcement Act of 2006. Encourage your friends and family to do the same. Letting the legislators know you are unhappy with the current laws is the best way to have them changed.
3. If pay leagues are not available to me, can I still play in a Free or Premium league?
a. Yes. Playing in a Free or Premium league is not restricted. We would encourage you to play in these leagues, and contact your state’s legislators.
4. Do I have to pay taxes on my winnings?
a. Yes. The I.R.S. requires you to report the net income as Other Income. If your winnings are over $600, you will also receive a 1099-MISC.
b. Although you are required to report the winnings, you are also able to deduct any expenses, as long as they are not more than your winnings.
5. What if I move after signing up for a Pay League?
a. League dues are paid at the time you sign up for the league. Where you live and are located when you sign up is what determines which states laws must be complied with. Moving during the season will not affect your eligibility for leagues you have already joined. You cannot, however, skirt geo-location guidelines by signing up when you are visiting one state and then operating your team from another state. If YouRulz discovers you have attempted to bypass our geo-location technology and you are not actually a resident of the state you claim when you sign up, we reserve the right to terminate your participation and you will forfeit the any monies you have paid.
6. What if one of the teams in our private league does not live in a state where you offer Pay Leagues?
a. Unfortunately, to be in a public or private pay league, you must live in a state where it is allowed. If one of your private league teams does not live in a state that allows fantasy sports Pay Leagues, you will have to either find a new person to replace him, or change to a Free or Premium league.