>> reporter: at sfak in this case is the fundamental meaning of democracy in america. al jazeera, houston. and you'll find much more on many of our stories on our website. the address to click onto is aljazeera.com. ♪ let's say you really like sports, and you really like betting on sports, but outside of las vegas, it's pretty much, illegal, right? so what do you do? don't bet on the games. bet on game derived performances. in games that don't really happen. it started out as a way for fans to be their own general managers. drafting, trading, seeing how it all works out for fun.

fantasy sports are now a multi-billion dollars business, and it's all legal. you want to bet? it's the inside story. ♪ >> welcome to "inside story," i'm ray suarez. what started out as a sub culture is now a huge business. assemble a team from real professional players. the real player's actual performances on the field, the court, the ice are converted into points and you win or lose against other players who have done the same and are hoping the teams they put together on paper beat yours. hobbyists, watched pro performs, and up and coming college players, and then there are league tables, standards, and commissioners keeping it cranking along.

but the intimate has accelerated the growth of fantasy sports allowing you to play against people you don't know, and now you can risk and win money, and websites assure you it's all legal. john henry smith takes a closer look. [ cheers and applause ] >> reporter: old school sports fandom, follow your team. new sports fandom, follow your fantasy league. rick runs a season that runs as long as the real season. >> yes, i'm a jets fan. but to also make some money along the way makes that that much more exciting. >> reporter: the winner of

rick's league takes home hundreds of dollars. but for those of you who don't want to wait that long to win, there's a new way to play. if you have watched any major sports programming this year, you have no doubt seen these ads. fan duals, are paying $75 million a week with a immediate cash payout. >> reporter: daily fantasy leagues offer the chance to win up to over a million dollars a week. >> i have won to date so far, profit, almost $5,000. >> reporter: they offer their ability to play for high stakes with a cost to pay that could be as low as a single dollar, sometimes even less. and that's made for an army of converts and made powerhouses out of the industry's two biggest competitors. draft kings and fan duel are now

valued at more than a billion dollars each, thanks to partnerships with heavy hitters who want a piece of the action. they are spending a lot of that capital to get you to play their game. according to i-spot-tv. fan duel and draft king consistently rank the highest in the u.s. >> they are both won $375 million. and they are battling it out. >> they brought in a combined $60 million in entry fees. twice as much as football betting the old fashioned way brought into las vegas during the same time period. in fact many argue that playing daily fantasy sports is just gambling, the new-fashioned way. mark is a law professor in new york. >> is it gambling? absolutely.

but is it illegal? >> reporter: the answer is no. playing daily fantasy sports online for money is legal, right now for one reason. when the federal law passed in 2006, lobbying from the major pro sports leagues resulted in lawmakers granting fantasy sports an exception or a carve out. >> for the carve out to apply, first it has to be a contest based on the relative skill of the players, secondly the prizes have to be predetermined and it has to be based on the results of multiple real world players. >> reporter: the skill angle is one the industry points to repeatedly as the reason why the government shouldn't lump it in with the likes of on-line poker. representative frank of new jersey has called for an investigation, he says to him,

daily fantasy sports clearly gam gambling. >> how is it any different? >> reporter: washington state senator has tried to keep her state one of five in the country where playing daily fantasy sports online is illegal. >> having an online gaming situation full-time online gambling. >> since this market was developing, even as some companies like fan duel were making money, i don't think congressmen were paying that muched a tense. and now it has lead to a lot of people looking up and saying what is going on here. >> reporter: concerns of legality barely register with ricky anthony. or the other players. they are too busy playing. >> sunday is the most, because i'm a football phone.

i'm constantly on the phone with fan duel, watching the television, so it's a 10-hour day for me. >> reporter: john henry smith, al jazeera. >> joining us for a look at this new frontier, is drew who won a million dollars playing fantasy football. welcome to the program. as we mentioned in the report, 75 million people play. for the other 250 million of us. let's start with basics. what do you do at the beginning of the season? how do you start a team? >> yeah, so the difference between daily and season-long fantasy football, at the beginning of the season you have a draft and it's the same nine or ten other people that you are competing with, and you each pick your players and that's your team for the season. you can manage your team. you can put players in, but the guys you draft are generally the

guys you are going to use for the entire season. the difference with daily fantasy sports basically every week is a new season. and instead of those assets being unique players that only you can draft, you are drafting within a salary cap, so the people you are competing against can use the same players as well as long as you stay under a callty cap. >> well, now that you have done it and done it well, what is your judgment? is there a certain amount of chance to it? or is it a game of skill? >> it is certainly a game of skill. the more players play they tend to get better, and they make better scores and choices. in the game of skill angle has been carved out within the lawmakers parameters, and it's certainly a game of skill. i think you see a lot of winning players near the top of leader boards over and over again. >> is it gamble?

>> i think gambling is a hot-button word for a lot of people. and i think if you use the word investing, it changes the perception for a lot of people. i view it similarly to investing. i'm cutting capital certainly at risk. i'm not always going to get a return on that capital, but i'm investing it with the expectation that over time i will be able to generate a return through my skill. so i view it as investing. and i think some people get hung up on the word of gambling. >> since you came from the world of finance first to fantasy football, is there a lot of overlap between the way you see the world and the way you work in those two arenas? >> certainly. there is a lot of similarity. each week i'm sitting there trying to assess the true value of a player, what i expect that

player's value to be worth. so if draft king is saying a player is worth $6,000 or 12% of the budget, i have to decide if that player is worth more or less than that number. and that's what a lot of investment people are doing when they are making decisions on stocks. they are trying to understand are they paying a price below or above the market expectation. so i think there are a lot of similarities between the two. >> drew stand by, we're going to pick this up in a moment. one of the most fascinating aspects of fantasy leagues is their relationship to real leagues. how have the leagues treated the rise of fantasy sports. fantasy sports, want a bet? it's the inside story. ♪

>> the money fell victim to the politics. >> they're more focused on getting jobs than our education. ♪ you are watching "inside story," i'm ray suarez. fantasy sports, want a bet? this time if you bet on the atlanta falcons beating the houston texans over the weekend, you won a little money, but unless you did it through a few narrow channels for legal sports betting, you were probably breaking the law.

but if you have this man on your fantasy team, you probably had a good day. if your fantasy squad won and paid off, it was perfectly legal. the leagues and congress, teams and owners, have had a complicated relationship to betting, and never miss an opportunity to increase revenue, and make darn sure they get their share. teams take the risks, draft and cultivate the players, and for now, they mostly don't see a penny. i'm back now with drew, and joining us from boston is christine riley, the senior research director of the national center for responsibility gaming. and christine, if you think about it, between lotteries and various kinds of online games and the multiplication of place around the country where you can

walk into a bricks and mortar place and play games of chance, the opportunity for the average american to gamble just seems to be ubiquitous compared to a generation or two ago. is that fair? >> yes, over the last 40 years there has been an incredible expansion of legalized gambling, yet the prevalence of disorganized gambling has remained relatively stable. so the exposure hasn't made that much difference -- it's about 1% of the population in the u.s. >> what is disordered gambling? what crosses the threshold? >> there are many criteria, and a lot of them sound like drug and alcohol abuse, because the person has a craving for the gambling, they may try to stop

and with withdrawal syst system -- symptoms, and they may get in trouble at work or with their family, and they may chase their losses, which means they go back to try to make up for losses. but overall it's like a lot of addiction, it's continuing to do something over and over again in spite of adverse consequences. >> you heard drew describing what makes fantasy league play a game of skill rather than chance, drafting, looking at past performance, anticipating future performance, making picks on that basis. is that an important distinction, legally and also in your part of the conversation, whether it is strictly a game or chance or a game of skill? >> scientists are very interested in that. and remember that includes poker, horse race betting and

many other games which probably involve some form of skill or research. and we don't really have a sense yet. it seems to us that generally people can get into trouble with all kinds of gambling. for example, people get into trouble with lottery tickets or bingo, or things that might seem very harmless, and so i think the thinking in the scientific community right now, is that things are not really addictive, but you have to look at addiction as the relationship between a vulnerable person and an addictive behavior. >> drew, you know a lot about this world, if someone is -- sees the ads, is entertained by them, because it seems like they come during every customer call break during some games, and they say, okay,

i would like to try this. are there controls built in, firewalls built in, so you can't get in ov-- over your head, and people who we don't want gambling can't get involved. >> the site operators into have some controls over how much you can deposit and how frequently. but this is really to be viewed as an entertainment opportunity for most people. most of the people because these are a game of skill, and not everybody who is going to play them will be elite skill right away. and if you have addictive personality characteristics, or vulnerability to addiction. there are certainly risks involved in playing daily fantasy. i think for a lot of the people

that are playing, the goal should be entertainment focused and making a choice. i would rather spend $20 on draft kings today than go to a movie. and those types of choices are the choices that i'm hoping most consumers are making. >> we'll pick this up in a moment. professional league's fears of gambling stems in part that big money could corrupt competition and influence club performance. since this is based on individual performances, does that remove some of the fear of corruption? is it only a matter of time before fantasy sports leagues find themselves in direct competition with the sports leagues themselves? want a bet? it's the inside story.

♪ welcome back to "inside story." i'm ray suarez.

fantasy sports, want a bet? this time on the program, as the fantasy leagues have grown, businesses have jumped in to monitize the fun. now it's not just the nerdy thrill of putting together a made-up team, the possibility of risking and making money attracts new players to the draft. it adds to the growing availability of legal games of chance, encouraging people to risk money they don't have, to turn over big risks of time, and other responsibilities. i'm back now with drew and christine, and christine, before the break you heard drew talk about some of the protections that are built into the websites. are they sufficient? >> yes, i think that it's instructive to look at the online gaming sites out of europe, for example. be-win party. harvard medical school did a really interesting study of they

players, and they found that though they didn't find a high rate of problems among their subscribers, they did find that many of the -- the ability to limit your wagers, and the ability -- easy ability to opt out of the program really made a difference for some people. so i think we should probably look to that. of course that study did not include u.s. audiences, and therefore, might not be generalizable to the u.s. but i think it's worth looking at. >> isn't there a certain amount of self identification that goes on, and they can you questions, but it's really up to you to answer them honestly, before you can pass various thresholds in science. we would have to conclude that no high school boys are watching internet porn or playing poker online if we thought that those thresholds were enough. >> yeah, i think it's tricky. i don't think there's any

guarantee. but i do think it's important to at least give people the ability to be informed about what is available, and maybe to make a decision ahead of time. and i think it's also important to look at what the average wages are. i don't know, because we don't have any studies of fantasy sports in the u.s., but the online gambling studies indicate really a very low rate of wagering, which leads us to believe that that's probably why there aren't that many problems in that particular market. >> drew, one thing that has been fascinating for me as a non-player, is watching how comfortable the big sports leagues in north america have become with the idea of this world existing based on intellectual property that they create. it's like trading derivatives you might say. the nba, and major league baseball, and the nfl, not only

encourage it, but they have sites on their own websites that give the points, that help you figure out who to draft and so on. they seem completely comfortable with this. >> yeah, and i think the leagues get a lot of benefit out of it. there's a lot of engagement that goes along with fantasy sports. at sometimes you'll get a random thursday night game, and maybe those fan bases aren't as strong, and the teams aren't doing as well, but fantasy players are interested because they have players going in those games and they are watching, and the leagues really enjoy that. and some of the other tertiary sports like golf and like mlb are starting to see growth in those aspects in terms of viewership and audience, because people are invested emotionally in watching these outcomes. >> you know, there's almost a radioactive charge on gambling for a lot of people in the sports leagues.

they are very wary about how to approach people who put money on the line. why is this different? and is there a danger if you are not careful. >> i think the difference is drawn by the lawmakers, and that's the distinction between fantasy sports and gambling, and i think the leagues are trying to toe that line as well as the lawmakers, but i think the general interest for the league, is that it help gen rate engagement. the main concern is the concern of players throwing games and things like that, and that certainly is reduced by fantasy sports where individual players are selected as opposed to teams. >> christine riley, before we go, is there research that needs to be done just to keep an eye on this world because it is growing so fast? >> yes, i think it would be very helpful to do more studies on the college-age population. because that is an age that is at higher risk for gambling

problems, and it's a lot easier to recruit subjects for those type of studies. so i hope we'll get more studies that are representative of the college students nationwide. >> drew is a research analyst turned professional full-time fantasy sports player. and we had christine riley along. thanks for joining us. i'll be back in a moment with a final thought on the gaming and the games themselves. stay with us. and send us your thoughts on twitter or follow me and get in touch, or visit our facebook page and tell us what you think about the growing phenomenon of fantasy sports leagues. we would love to hear what you have to say. ♪

♪ throughout the history of sports in america, the money has only gotten bigger and bigger, and cheating has been a danger, a threat. a boxer taking a dive. a jockey holding back a horse. a pitcher paid to throw a game. a basketball told to win but not beat the spread. the governing authorities have tried to watch, control, reign in the apparently human tendency

to want to win so bad, you cheat to do it. it's hard to see how fantasy sports can affect and infect the performers. the effect that any one quarterback, point guard, or slugging center fielder has is muted and becomes just one factor in a big collection of factors that determines the outcome both on the field and on your fantasy team. but we are always flirting with moving the line when sports leagues become a happy home for gamblers, invest in gambling science, and innocently insist that the built-in protections on the internet. game the site and nobody knows whether you are a problem gambler or a kid. i suspect that already, somebody, somewhere is trying to figure out how to cheat. i guess we'll adjust when they

do. until then, play ball. i'm ray suarez and that's the "inside story." ♪ ♪ >> this is al jazeera america. live from new york city. i'm richelle carey in for tony harris. far from over, the new danger in the carolinas from the flooding rain, and where the storms a are -- headed next. bp agrees to pay millions in the gulf oil spill. pointing fingers, the u.s. says call for that air strike killing d