NFL's Roger Goodell sees difference between fantasy and gambling

Testimony from NFL commissioner Roger Goodell and a league executive as part of an unsealed 2012 deposition reveals some of the reasoning behind the league's staunch opposition to expanding legalized sports betting in the United States.

In testimony in a case over whether to legalize some sports betting in New Jersey, Goodell stressed that an association with gambling would damage fans' perception of the NFL, while downplaying the significance of the league's playing games in London (where sports betting is legal) and its relationship to fantasy sports. Lawrence Ferazani, senior labor litigation counsel for the NFL, went a step further.

"The NFL is in a revenue-generating business," Ferazani said. "If the NFL believes that sports gambling would allow it to increase its revenue, the NFL would engage in that activity. Based upon our studies and analysis, we know that [sports betting] will negatively impact our long-term relationship with our fans, negatively impact the perception of our sport across the country."

Citing the NFL's 2012 gambling policy, Goodell said the league generally views gambling as something involving three elements: prize, chance and consideration. He added, "I think the 'generally' gives some leeway into that.'"

"We don't look at fantasy sports as gambling," Goodell said in testimony.

Ferazani was asked whether he'd consider betting $20 on the number of touchdowns Tom Brady throws to be sports gambling.

"I believe that would fit that definition, sure," Ferazani said.

The deposition testimonies from Goodell, Ferazani, then-NBA commissioner David Stern, NCAA president Mark Emmert and others initially were sealed and heavily redacted in parts during the New Jersey case, but recently were discovered to be unsealed by gaming and sports attorney Daniel Wallach.

"It is not unusual for court-filed materials to be initially sealed and heavily redacted and later unsealed," said Wallach of the firm Becker & Poliakoff, who has followed the ongoing New Jersey case throughout the past three years.

During the deposition, attorneys for New Jersey pointed out that the league prohibits NFL players from accepting prizes with a value of in excess of $250 on a fantasy football game in order "to avoid any appearance of impropriety, which may result from participation in fantasy football games by individuals perceived to have an unfair advantage due to their preferential access to information."

Goodell said he did not know the reasoning behind the $250 denomination but said he was not concerned about fantasy football leading to a game being compromised.

"Fantasy football's not based on the outcome of a game," Goodell said. "it's based on the performance of individuals that they select."

At the time of the deposition, in 2012, daily fantasy sports was in its infancy but has since exploded into a billion-dollar industry. At the league level, the NFL has no sponsorship deals or investment in daily fantasy companies. But teams are allowed to accept advertising from daily fantasy operators. Twenty-eight of the 32 NFL franchises are aligned with daily fantasy operators. Some, including the New England Patriots and Dallas Cowboys, hold equity stakes in daily fantasy companies.

NFL spokesman Brian McCarthy has said repeatedly that the league considers daily fantasy a game of skill. But the NFL -- and the Justice Department -- also has said in legal proceedings that traditional, point-spread betting is skill-based. In an email, McCarthy said, "Fantasy games are considered legal and we operate under the law."

In terms of fantasy sports' legality, McCarthy pointed to the Unlawful Internet Gambling Enforcement Act of 2006, which includes language precluding fantasy sports that meet certain criteria from being a "bet or wager." The NFL, along with the other major professional sports leagues and the NCAA, sent a letter to members of Congress asking them to pass the UIGEA. But five states do not allow daily fantasy sports, and several other states are examining its legality. Plus, a U.S. congressman has called for a hearing on the matter.

Meanwhile, the traditional sports betting market in the U.S. is estimated to be as large as $400 billion, with less than five percent of money wagered with regulated sportsbooks. The NBA, led by commissioner Adam Silver, has called for Congress to create a federal framework for regulated sports betting and allow interested states to opt in. Major League Baseball commissioner Rob Manfred has said fresh consideration is needed on sports betting. But the NFL has maintained its opposition to regulating sports betting, saying it threatens the integrity of the game.

When asked why the NFL believes the current of system of unregulated sports betting, the majority of which takes place offshore, better protects the integrity of the games than a regulated market overseen by licensed officials, McCarthy said, "It's our preference that there was not onshore or offshore betting on the outcome of our games, but we operate our business under existing laws."

The New Jersey sports betting case is currently in the Third Circuit Court of Appeals, awaiting a potential rehearing. The NFL, along with the other professional sports leagues and NCAA, are suing the state to stop it from offering legal sports betting at its racetracks and casinos.