Dear Mr. Schonfeld:

We have reviewed the materials you presented during your visit on September 3, 1998, as well as those subsequently forwarded to us by your attorney, and have determined that the All Star Fantasy Challenge fantasy sports games (AAll Star@) would not constitute gaming within the meaning of the Indian Gaming Regulatory Act.

You are proposing to have Indian gaming operations use All Star as a marketing device, to develop new patrons and to bring those potential patrons to the premises.  All Star is, essentially, a fantasy league system where the object is to pick players whom the participant believes will have the best performance during the upcoming week, and points are scored based upon the players= actual game performance.  All Star is adaptable not only to baseball and football, but to other sports including NASCAR racing.  Persons desiring to play the fantasy games must submit entry ballots for play at the Indian gaming facility, where, presumably, they may at some point choose to do some gaming.  The players= participation in the fantasy league also exposes them to the Indian gaming operation and helps in cultivating the players as casino patrons. 

Our understanding of how the game is played, based upon information which you have furnished, is as follows.  The cost of entry for players is $10, however, provision is made for an Alternate Method of Entry (AMOE).  Players who use the AMOE must properly complete and mail their entries in a manner which  assures the entry is received before the start of play.  However, no purchase or fee is required to play under the AMOE.  The option of payment of an entry fee relieves the player of responsibility for dealing with such details, so that, in other words, the $10 buys convenience.  Paying participants are also eligible for gifts and promotional material which may not be provided to AMOE participants.  Participants select a roster of league players, and score points based upon the success of their roster.  Cash prizes are paid to the most successful participants from a prize pool funded by entry fees.  Lower level winners receive free play in later contests and eligibility for a grand prize drawing.

According to the briefing which you provided, the $10 entry fee is distributed as follows: $5 is allotted to the prize pool; $1.30 is used to pay the cost of operations ($1.20 of this goes to your company, $.10 to Xerox); and the remaining $3.70 is split evenly between your company and the gaming activity.  Operating costs attributable to AMOE participants are absorbed by your company.

You also explained in your briefing that, while Fantasy Sports Marketing, Inc. will train casino employees who handle entrants and will be actively engaged in the marketing process, neither you nor any person associated with your company will be involved in management of any part of an Indian gaming activity. Accordingly, and based on our review of the blank AAgreement@ which Fantasy Sports Marketing, Inc. would use in its arrangement with an Indian gaming activity, we have determined that such an agreement would not be a management contract, within the meaning of  the Indian Gaming Regulatory Act, and would not therefore require approval by the Chairman of the National Indian Gaming Commission.

Gambling involves three elements: chance, prize and consideration.  Clearly, play of All Star Fantasy Challenge involves a prize for the winners.  Also, while there is some skill required to win in fantasy sports games, there is also an element of chance; in this respect it is not unlike picking winners at a horse race.  Nonetheless, it is the lack of consideration which allows the NIGC to determine that play of All Star Fantasy Challenge is not gaming.  So long as the Alternate Method of Entry is available to potential players and so long as persons who have used the Alternate Method of Entry may compete for the prizes on equal footing with the paying entrants, the All Star Fantasy Challenge is not gaming under the Indian Gaming Regulatory Act.

Our decision is based upon the understanding of your proposal as expressed in this letter.  If that understanding is incorrect, we may need to revisit our opinion.  As an additional caveat, in dealing with some tribes it may be necessary to consult tribal-state gaming compacts to ensure that they do not contain provisions which would have an impact upon operation of the All Star Fantasy Challenge.  

Please call me or Richard Schiff of my staff if there are any questions.  We may be reached at (202) 632-7003.