By: Gabriela Groman
The New York Court of Appeals held, on March 22, 2022, that interactive fantasy sports contests do not constitute “gambling” within the meaning of New York’s constitutional restriction on gambling in White v. Cuomo. [1] The Court reasoned that fantasy sports betting are not “predominately skill-based competitions.” [2] But where does this leave fantasy better’s privacy and security on the numerous apps used throughout the season?
Since the launching of sportsbook apps, those who gamble online increase their privacy and security risks. [3] During the first 16 days of mobile sports betting in New York State, participates wagered over $1.1 billion. [4] Data being collected by betters can include: birthdates, Social Security numbers, physical addresses, email addresses, financial and banking information, geolocation, e-wallets, wire transfers, and promotional credits. [5] Based on NYCRR Part 5329 and 5330, operators are meant to have in place a monitoring system that can identify any unusual or suspicious wagering activity. [6]
Operators, and sports betting fans, should be aware that a sports betting app’s security data may flow through third-party contracts, which will increase the risk of privacy and security breaches. [7]
Not only is it vital that operators maintain their customers’ private information for their customers’ sake, but since New York has the highest tax rate on mobile sports betting in the nation, operators have to worry about the negative publicity that would come with a security breach, thus leading to a major loss in revenue. [8] Operators must carefully work through vendor management in order to maintain security and contain cyber risks. [9]
Even with the privacy and security risks, it does not seem as though sports betting will slow down anytime soon. Betters, like always, should be cautious of the sites they use to wager and the information they are freely giving to apps
[1] New York Court of Appeals Rules That Interactive Fantasy Sports Contests Do Not Constitute Gambling Under State Constitution, Gibson Dunn, March 29, 2022, https://www.gibsondunn.com/wp-content/uploads/2022/03/new-york-court-of-appeals-rules-that-interactive-fantasy-sports-contests-do-not-constitute-gambling-under-state-constitution.pdf.
[2] Id.
[3] Klein, Sharon and Daniels, Jennifer, A Safe Bet? Privacy and Security Law for Online Sports Wagering in New York State, New York Law Journal, March 29, 2022, https://www.law.com/newyorklawjournal/2022/03/04/a-safe-bet-privacy-and-security-law-for-online-sports-wagering-in-new-york-state/?slreturn=20220230105039.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Spector, Joseph and Gronewold, Anna, Mobile sports betting tops $3.5B in wagers, Politico, March 29, 2022, https://www.politico.com/newsletters/new-york-playbook-pm/2022/03/11/hed-goes-here-00016456.
[9] See [3]