“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” he said, according to the New York Times. “Today we have sent a clear message: not in New York, and not on my watch.”
Schneiderman missed the mark with his decision. There is nothing unlawful or wrong with the kind of difficult, engaging and skill-based games that can be found on DraftKings and FanDuel. Quite frankly, the only outrageous thing about DraftKings and FanDuel is the amount of mind-numbing commercials that plague ESPN 24/7 and commercials on football Sundays across every network.
While gambling has long been regulated in the state of New York, daily fantasy sites have been allowed to operate thanks to the Unlawful Internet Gambling Enforcement Act’s exception for online games of skill. Fantasy sports certainly fit into the category of online games of skill. People spend days, sometimes even months, reading every fantasy article possible to put together the team that will win them bragging rights amongst their best friends. DraftKings and FanDuel do the same thing, but instead of your friends, you can brag with strangers from all across the country and the bragging rights come in the form of dollar signs on a daily basis.
Immediately following Attorney General Schneiderman’s decision, DraftKings sent an email to New York resident participants which stated their displeasure with the decision. It included links that allowed users to “let [Schneiderman] know that New York has bigger challenges than fantasy football,” claiming that playing daily fantasy sport is “fun, entertaining and a game of skill.”
While there are certain things on DraftKings and FanDuel that we do not support, like Washington Redskins’ wide receiver Pierre Garcon’s suit against FanDuel for not compensating players for using their likenesses on their applications, we do not believe that one-day fantasy sites on the surface are wrong.
The biggest concern with the industry and the likely reason for the New York ban is the fear of future insider trading between the two industry leaders. The two were at the center of controversy in early October after a DraftKings employee, who had access to detailed statistical data, won $350,000 on FanDuel during the third week of the NFL season in mid-September.
The public and government had legitimate reason to be concerned at this point, but since the alleged insider trading, DraftKings and FanDuel have barred their employees from participating in any contests on their own or competing in daily fantasy sports platforms.
Outsider regulation is not needed. DraftKings and FanDuel have and will continue to self-regulate effectively in order to ensure the integrity of the game that they provide to a large sports audience. Just take a look at how quickly the two companies came to the decision to bar their employees from participating in contests of any form: the news of an employee’s big win broke nationally on Oct. 5, and the two companies banned their employees just two days later on Oct. 7.
There are much bigger things that the government needs to worry about. Republican Presidential Candidate Chris Christie addressed the topic during CNBC’s Republican debate on Oct. 28.
“Wait a second, we have $19 trillion in debt,” the New Jersey governor said. “We have people out of work. We have ISIS and al Qaeda attacking us. And we’re talking about fantasy football? Can we stop?”
To put it simply, daily fantasy sports are a form of entertainment that include both skill and chance. If you ban them, what’s next?
Will you and your friends be prohibited by law to have a fantasy football league and to win each other’s money through entry fees?
The ruling hurts the casual DraftKings and FanDuel player. The twenty-six-year-old football fan who throws a couple of dollars a weekend into the app to see if a team of Tom Brady, Julius Thomas and the Broncos Defense can win them a couple hundred dollars is being punished due to the greed of employees within the company trying to cheat the system.
But at least for now, you have to travel north to Connecticut or west to New Jersey to compete in such contests. That needs to change.