Real-money DFS would “cease to exist” if called gambling, analyst says
Classifying real-money daily fantasy sports (DFS) as gambling would lead to the death of the industry, an analyst has said.
Varying opinions on the issue of whether real-money fantasy sports in the US should be regulated have recently been expressed by US political figures.
Nevada Senator Harry Reid referred to DFS as “the only unregulated gambling operation in the country”, while New Jersey governor Chris Christie told CNN: “They shouldn’t regulate fantasy football. It’s a stupid idea.”
The Nevada Gaming Control Board announced in October it has ruled that operators are not able to offer real-money DFS contests without possessing a licence to operate a sports pool issued by the Nevada Gaming Commission and that a licensed operator that offers DFS must comply with laws that apply to licensed sports pools.
Adam Krejcik, managing director at gaming research firm Eilers Research, told Gambling Insider that operators would not be able to overcome being brought in line with gambling regulations.
He said: “I think if you classify it as gambling and you try to regulate it in the same fashion as online gambling, the industry ceases to exist – simple as that. If that’s your goal, then so be it. Just be upfront and say we want to get rid of this industry, because that’s what will happen.”
Assemblyman Adam Gray introduced a bill in September that would that would place licensing and regulation controls on DFS in California.
“The model that exists today cannot exist under the kind of proposals that I’ve seen come out of Nevada and what’s been proposed in California,” Krejcik said. “They would just have to pull out of those states. We’ve run our own analysis and this model doesn’t work under those means. I don’t think there’s a lack of consumer protection right now and I don’t think these games are corrupt.”
Nigel Eccles, CEO of daily fantasy sports operator FanDuel, said in an email to FanDuel users: “A number of smart, but tough proposals in various state legislatures have begun to emerge, which I believe can serve as the basis for the sensible regulation of the fantasy sports industry.”
I think if you classify it as gambling and you try to regulate it in the same fashion as online gambling, the industry ceases to exist – simple as that.Adam Krejcik
When asked for his opinion on why Eccles has taken this stance, Krejcik said: “Their ideal scenario is a term I’ve been hearing called ‘regulation-lite’, where there’s regulatory oversight that appeases the politicians and the regulators, but it’s not as extreme as what the Nevada Gaming Control Board instituted.”
Ethan Haskell, written content manager of FanDuel’s competitor DraftKings, accidentally released data about a Millionaire Maker National Football League contest that DraftKings hosted in October.
Haskell reportedly won $350,000 playing with FanDuel in the same week that the data was leaked.
Matthew Boccio, who works in product operations at FanDuel, was in the same month reported by DFS Report to have become one of the top 50 overall DFS players ranked by RotoGrinders, using the username PetrGibbons.
Referring to those two cases, Krejcik said: “Those incidents arguably set off this media storm and frenzy and brought the spotlight on the industry, and while we believe it was taken out of context, FanDuel and DraftKings had become easy/visible targets given their aggressive TV marketing campaigns.”
It was announced in October that the Fantasy Sports Control Agency is to form, which will act as a self-regulatory body for the fantasy sports industry.
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