The exact opposite happened in the week of October, when the bubble in the number of participants in the US Fantasy Sports was predicted to burst due to a scandal over clandestine clues between the industry’s two largest websites. DraftKings and FanDuel had their best weekends with over $ 45 million in entry fees and a combined income of nearly $ 5 million, respectively.
The world of fantasy sports, especially football, has exploded over the past decade, creating millions of winners, losers, and a legal system, making you wonder where the lines between competitive performance and sports betting should be drawn in an online world.
There are two ways to look at the evolution of Daily Fantasy Sports (DFS), and each has its justification.
The first says that DFS is just the logical technological evolution of fantasy football that can be traced back to the early 1960s when it was designed after a fantasy golf game developed by the then owner of the Oakland Raiders, Bill Wickenbach would have. Together with a columnist from the Oakland Tribune and another employee of the Raiders, he developed fantasy football in 1962.
Wickenbach, several members of the Raiders’ staff and some Tribune employees formed the first league of eight teams, which was called “The Greater Oakland Professional Pigskin Prognosticators League”. The group held today’s familiar pre-season draw and agreed on a points system, including 25 points for field goals and touchdowns, 10 points for a successful additional point attempt and 200 points for a ball loss or kick that resulted in a touchdown.
The concept was picked up by others, and within a few seasons bars in the Greater Oakland area, which traditionally hosted events such as quiz nights to attract customers, experimented with fantasy football. Similar games for other sports, such as Strat-O-Matic Baseball, appeared, but until the late 1990s, until the late 1990s, Fantasy Sports only occupied a small number until players were ready to go out of their way and keep track of statistics using paper and pencil Niche.
With the advent of the Internet, no one in a league had to be mathematically talented, because real-time statistics could be updated live online. CBS Sports and Yahoo! Sports entered the fantasy football market early on. At that time, registration was free and was treated as an “extra” for each website rather than the main reason for visiting the website. As the well-founded prediction aspect of this sport became popular, more websites developed fantasy football applications to capitalize on this growing interest.
The other view is that DFS websites are nothing more than modern gambling in the back room. When illegal sports betting spread across Las Vegas in the mid-20th century, it was fought (and largely eliminated) by moving and regulating it into the legal gaming environment.
Those who support this thesis believe that when a person’s money is exposed to a situation based on the outcome of an event and the outcome of that event results in the loss or gain of money, it is gambling.
According to the data on the subject, most DFS players neither visit casinos regularly nor place sports bets. The average DFS player loses $ 20 at an unofficial March Madness college basketball pool rather than betting on a football team’s win in a casino setting.
Even though the historical connection to traditional conventional casino sports betting can hardly be disputed, the FSTA leads the enormous number of free options for participation and claims that DFS players participate because of the competition and not because of the money.
“Fantasy Sports players are motivated to do this hobby for reasons that are unrelated to money or prices,” says the FSTA website. “The vast majority of Fantasy Sports players take part in free competitions that do not offer cash or material prizes (according to an IPSOS research reportin 2010, over 74 percent of the 30.6 million Fantasy Sports players took part in a competition or used league software that did not include a cash or non-cash prize). The only pleasure is winning and measuring with other sports fans. Indeed, frequent surveys among fantasy sports players show that the most important reasons for playing are measuring with friends, expanding the sporting experience and forming a league with friends. ”
It is an interesting argument that is made because the two companies represented by FSTA, FanDuel and DraftKings, highlight winners of large amounts and emphasize the opportunity to make money in their advertising. FanDuel’s advertising campaign has clearly positioned the following statement: “Payouts of more than $ 75 million a week! More than on any other website! ”DraftKings is a little less screeching when it comes to advertising, even if the websites of both companies highlight the possibility of winning money at the top of their homepage. On the DraftKings website, each of the first three lines emphasizes that money can be won.
THE ACTUAL PROBLEM
So if millions of dollars are bet at DFS, why isn’t this industry just the online evolution of gaming gambling? It is a question that the Attorney General is now addressing – and a question that industry organizations such as the Fantasy Sports Trade Association (FSTA) vehemently defend by saying that it is not a question of pure luck but a game of skill.
The FSTA website defends DFS as a game of skill in the following words: “Managers have to take into account a myriad of statistics, facts and game theories in order to be competitive. There are many thousands of websites, magazines and other such publications that endeavor to summarize the huge amount of data available on Fantasy Sports in order to keep their readers up to date and therefore competitive. To win, a manager needs to know more than simple schedules and statistics. He also needs to consider injuries, coaching styles, weather conditions, chances of success, home and away record, and a lot of other information to be successful as a fantasy sports manager. ”
The website goes on to say: “At the highest levels of competition in Fantasy Sports (e.g. the National Fantasy Baseball Championship), it can always be seen that the top players win games more often than would be the case if the competitions were complete or would be very random. This pattern was repeated in many competitions and tournaments: especially skillful fantasy players win more often. ”
The argument is not inadmissible, and the FSTA and other industry leaders refer to the government that drafted the 2006 Unlawful Internet Gambling Enforcement Act. This law targeted online casinos and especially poker rooms by prohibiting the transfer of money from a person’s bank account to an online casino. The wording of the law defined some activities that were not considered online gambling, especially horse racing and fantasy sports.
DFS defenders point out a special passage in the 2006 Unlawful Internet Gambling Enforcement Act: “… a result that reflects the relative knowledge of the participants or their skill in physical reactions or physical manipulations (but not by chance), and in the case of a fantasy or simulation sports game has a result that is mainly determined by collected statistical results of sporting events, including the individual performance of non-participants in such sporting events … “
In 2006, according to an estimate by the FSTA, 18 million people participated in Fantasy Sports online (almost exclusively football at the time) and simply paid a fee of no more than $ 50 to participate in one season. Even though this brought the industry sales of several hundred million dollars, at that point it was only a small percentage compared to online poker, where sales were estimated at $ 2.4 billion in 2005 (just before the government hit hard against this). Despite the increase, this is less than 10 percent of DFS sales in 2015.
GOVERNMENT GOVERNMENTS TURN ON
At this point in time, even though there was an increased interest in redefining “games of chance” or “games of skill” at the national level, the US government leaves it up to the states to decide which category DFS falls into.
According to the LegalSportsReport.com website, neither FanDuel nor DraftKings do business in Arizona, Iowa, Louisiana, Montana, Nevada or Washington. FanDuel has also stopped accepting deposits from players in New York.
LegalSportsReport.com points out that operating laws and participation laws are completely different in most states, and DraftKings has, for example, imposed restrictions on those states based on existing or pending laws that may not reflect a state’s current regulations ,
If you think this is confusing, take a look at Nevada, home of Las Vegas, the only state in the United States that allows sports betting. The country’s gaming control committee decided in mid-October that DFS would be equivalent to sports betting and would therefore require a casino license. However, should FanDuel and DraftKings apply for this license, any other country where sports betting is illegal could use this as an argument that these companies are promoting gambling rather than skill games.
Many attorney general’s offices examine whether they are authorized to prohibit DFS operations and whether they are requested to do so. The states currently investigating this question include Illinois, Pennsylvania and New York. Most favor the argument that has been used as casinos have spread across the United States over the past 20 years (40 states now have casinos) and could cause the addiction problem to become a public health issue becomes.
The FSTA defends its position that DFS is very different from sports betting by pointing to the vast majority of organizations that appear to approve of DFS.
“It is difficult to find organizations that are more sensitive to sports betting issues than the Major League Baseball and the National Football League. Both leagues support fantasy sports and support the marketing of fantasy sports to consumers. In addition, they even run free and paid Fantasy Sports games on their official websites (MLB.com and NFL.com) and advertise them, ”says the FSTA website.
“In the same way, all major professional sports leagues support their own fantasy sports leagues and often host them: NASCAR, NHL, PGA, NBA and many more. Almost all major media companies in the United States, many of whom are very sensitive to being associated with sports betting, support and promote Fantasy Sports: Yahoo !, ESPN, NBC, Sports Illustrated, CBS, and many more. ”
Other defenders of the fantasy sports industry have cited the enormous amount of fantasy sports’ information cosmos as the reason why the game should be viewed as a game of skill rather than gambling. They argue that the amount of magazines, TV programs, websites, and cell phone apps that are devoted to building a better team but not in any way placing bets shows that money that changes hands based on results is only a small part of DFS.
Critics point to games like poker and blackjack, which many also consider skill games, even though the fact that the cards are randomly distributed in the deck suggests that it is a game of chance. If you look at these other games despite the fact that they are currently regulated as gambling, is there a clear answer?
Is the statistical knowledge of how to deal with a pair of bags in blackjack identical to the statistical knowledge of what a quarterback does and in which position he fits into your fantasy team? Even the best blackjack players continue to lose and the quarterback in question may contort their shoulders while training.
“Yes, blackjack is a game where skill can give players a positive expectation,” said Schwartz. He also thinks it’s a question of semantics. While the UNLV Center for Gaming Research is not currently tracking DFS sports, Schwartz would be happy to do so if he could find reliable resources. Superlobby, based in Great Britain, agrees with Schwartz and calls the debate on his website a “semantic game with high stakes”. SuperLobby supports regulations comparable to those currently in force in Massachusetts that require DFS operators to promote responsible participation among players.
Given an industry like DFS that has grown so rapidly and quickly, it is not surprising that the government appears to be slow to respond. Regardless of which side of the game of skill versus gambling you are on, it can be assumed that 2016 will bring considerable clarity to the future of online DFS.