Fantasy sports: how the business works

In fantasy sports, players build virtual teams from real athletes and score points from those athletes' real statistics. Season-long leagues are mostly free and social; daily fantasy sports (DFS) are short contests with entry fees and cash prizes, and they are a business with its own regulation.

How DFS makes money

A DFS contest collects entry fees, pays most of them back as prizes and keeps the rest as the operator's fee, often called the rake, just like a poker tournament. The operator does not bet against its customers, which is why DFS has argued that it is a game of skill rather than gambling.

Skill or chance

In many US states, DFS is regulated under its own rules as a contest of skill, with licences, age limits and player protections.
Some states treat DFS as gambling and require a gambling licence, or ban it.
"Pick'em" contests, where the player predicts whether athletes will beat statistical lines, look closer to betting and have been challenged by several state regulators.
In India, the Promotion and Regulation of Online Gaming Act, 2025 banned all online money games, fantasy sports included, whether of skill or chance.

Regulation at a glance

Because the legal answer depends on how each jurisdiction classifies skill, fantasy sports is not a column in our tracker; check the market pages of the regulation tracker and the regulator directly.

Updated: 2026-09-26