Daily fantasy sports sites are forms of online gambling
By Alyssa Davis | Published Dec. 9, 2015
What’s the difference between a day at the horse track and a round of daily fantasy sports? The former operates with a gambling license while the latter does not.
In any case, they’re both gambling and they’re both sports betting.
DraftKings and FanDuel, the two leading daily fantasy sports companies operate without a gambling license under a federal law passed in 2006 that allows fantasy sports to participate in online wagering.
The multibillion dollar industry argues that it takes more skill than luck to be successful in their games which places them outside of the gambling umbrella.
Fantasy sports take no more skill than horse betting. In both the gambling hopefuls research statistical data and choose what they deem to be well-rounded subjects with the end goal being to win money. But, odds don’t always produce results and no matter how good a horse or a player looks on paper, off days are inevitable. This is what makes both activities gambling.
Recently the New York State attorney general, Eric T. Schneiderman, sent cease-and-desist notices to DraftKings and FanDuel saying that their companies’ games were forms of illegal gambling.
A New York Times article quoted Schneiderman as saying:
“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fl eece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch.”
In that same article the New York Times reported on an investigation of their own which yielded results involving DraftKing and FanDuel employees.
“…operators of online gambling sites had begun investing in fantasy companies and that some of DraftKings’ senior managers came from online gambling companies or were professional poker players,” the news organization said.
If DraftKings and FanDuel games are not online gambling the New York attorney general would not get involved and people in the gambling industry would not be so inclined to work for said organizations.
Another interesting fact is that during week three of the NFL both sites were put under the microscope and were accused of insider trading after an employee of DraftKings, Ethan Haskell, accidentally released inside information before the finalization of the week’s lineups.
The data showed which players were most utilized in all the lineups for DraftKings’ Millionaire Maker contest. Having this information could provide an unfair advantage.
That same week Haskell won $350,000 on the competitor site, FanDuel.
It’s more than coincidence that Haskell won big bucks on a site similar to the one that he works for because he can easily use private company information access to help him pick a winning team. The kind of private information that increased his odds of winning.
No amount of skill or depth of research that an average fantasy sports player possesses can equal the detailed insider information that employees like Haskell have at their finger tips. This in itself makes fantasy sports participation more like casino gambling then a game of skill.
In October the State of Nevada said that daily fantasy sports should be considered gambling, rather than a game of skill, and ordered the websites to suspend operations until they pursued state gambling licenses.
Through all of this DraftKings and FanDuel remain hellbent on separating themselves from the description of gambling sites. Th is has to do with one thing – their bottom line.
Until Schneiderman sent cease-and-desist notices, the companies were able to operate in all 50 states.
The minute they identify themselves as gambling organizations they will no longer be able to do business countrywide as there are states that don’t allow online gambling and/or sports betting. This will greatly effect their earnings, taking a huge bite out of the multi-billion dollar corporate pay day.
DraftKings and FanDuel should embrace what they are and stop trying to beat the system. They had a good run while it lasted but now it is time to call a spade a spade. As every gambler knows sooner or later the odds will turn against you. They will have to decide whether to take their winnings and walk away or play by the rules and let it ride.