D been quite the phenomenon and craze in the U . S . for some years now . However , with the popularity of the game came the regulators ’ interest in the qualification of the game ( gambling / skill / combination of both ) and the potential need for licensing under gambling laws and / or creating specific regulation for DFS operations – not least to join in on the fun and potentially gain some tax revenues in the process .

Multiple U . S . states have moved to regulate DFS in some way or another , yet the regulatory approaches taken by the states differ considerably throughout the U . S . Whilst some states have chosen to clarify by legislation that DFS is legal or have provided for specific DFS regulation , DFS remains prohibited in other states and / or is qualified as gambling operation requiring a licence .

Let alone the inconsistency of U . S . DFS-regulation , one will clearly have to conclude that things have become more complicated and that the unregulated days of DFS in the U . S . have long gone .

All the more reason for U . S . DFS operators to try out and test new , potentially lucrative DFS markets elsewhere .

Would Europe , where only few countries have specific DFS regulation or guidelines in place and as a consequence most countries seem “ unregulated ”, be a viable option ?

Taking Germany as an example , the following will outline the key regulatory issues and potential pitfalls DFS operators will be confronted with in supposedly “ unregulated ” European DFS markets . The article will emphasize the importance of potentially having to make adjustments to the product depending on the ( gambling ) regulations that are in place in the respective jurisdiction in order to ensure compliant and tax-efficient operations . Clearly , the extent to which the product will have to be adjusted will be a determining factor when making the decision on which European markets to enter .

“ Gambling ”? Much like in the U . S ., starting point of any legal discussion on DFS in Germany or any other country where DFS is not specifically regulated , will be whether the offering in question at all qualifies as “ gambling ”.

German gambling regulations , namely the Interstate Treaty on Gambling , subjects all “ games of chance ” to Germany gambling regulations . A “ game of chance ” consist of three elements which have to be met collectively and is a game where ( 1 ) the player pays a consideration of money ’ s worth in order to ( 2 ) acquire a chance to win a prize of money ’ s worth , and ( 3 ) the outcome predominantly is a matter of chance .

Germany , current FIFA World Cup champion and a football-obsessed country full of aspiring football managers and wannabe-coaches , has of course already seen courts rule on the question of whether a certain manager-style fantasy league game qualifies as a game of chance or not .

In 2013 , the Federal Administrative Court ( the ‘ Court ’) clarified that a fantasy league game where players let their virtual football teams compete against each other and winnings depended on whether and how the real-life Bundesliga players met certain criteria in a real-life game did not qualify as a game of chance , despite players paying to register a team and being able to win prizes if at the end of the month / the

16 | European Gaming Lawyer | Autumn Issue | 2016

European Gaming Lawyer magazine Autumn 2016 | Page 16

Guiding DFS operators across the pond – DFS in supposedly “ unregulated ” European markets