A first-of-its kind lawsuit against operators of fantasy sports leagues has turned out to be a bit of a fantasy itself as a New Jersey judge ruled that the leagues “do not constitute gambling as a matter of law.”

Chuck Humphrey, a Colorado attorney and professional poker player, sought recovery of “all money lost by players” participating in the leagues, which he described as “unlawful gambling schemes.” Since fantasy sports are games of chance not skill, he argued, the entry fees that players pay in expectation of a prize are bets or wagers.

Under a law passed in 1797, New Jersey allows third-party recovery of “wagers, bets or stakes made to depend upon any race or game, or upon any gaming by lot or chance.” Humphrey named the operators of the Sportsline, ESPN, and TSN leagues as defendants in a complaint filed in June 2006.

But U.S. District Judge Dennis M. Cavanaugh granted the defendants' motions to dismiss a case which was always a long shot, finding that entry fees paid to enter a contest with a guaranteed prize are not bets or wagers as a matter of law.

Congress, he noted in a June 20 opinion, had specifically omitted fantasy sports from an anti-gaming law passed last year, and

This Court will not ... extend the coverage of a 200-year old statute to an activity far removed from the traditional gaming it was intended to cover.

More than 15 million people spend an estimated $1.5 billion a year to play fantasy sports and no state has ever prosecuted fantasy sports league operators or players for illegal gambling.

Citing a lottery case precedent, Humphrey argued that fantasy sports “has all of the necessary elements of gambling: prize, chance and consideration;” the league operators, for their part, said players compete against each other “in a test of team management skills.”

Cavanaugh did not address that issue, however. Humphrey, he said, had sued under New Jersey's betting and wagering law, not its lottery statute, and, therefore, “Plaintiff’s argument that fantasy sports leagues are games of chance is without effect.”

The judge also said the suit “lacks the most basic factual allegations necessary to support” Humphrey's claim of recoverable gambling losses. “Plaintiff fails to allege the purported amount of alleged 'losses,' or when those alleged losses were purportedly sustained.”