With the daily fantasy-sports industry facing various challenges at the state level, the federal government is reportedly planning to get involved.
SportsBusiness Daily gathered multiple reports indicating Congress will hold hearings as early as November regarding the abundance of fantasy sports games for money.
Daily fantasy sports websites are already collecting signatures to petition this ban, as well as information that might prove this type of sports gambling requires skill to win as opposed to luck.
Like Roger Sharpe who called his shot to end the prohibition on pinball, daily fantasy sports may need to rely on the proficiency of so-called experts to prove that daily league sports betting requires a certain level of skill and research to win.
“We were thinking about friends getting together and playing fantasy sports where, at the end of the season, there would be a winner,” New Jersey Democratic Senator Robert Menendez told ESPN regarding the 2006 law legalizing fantasy sports, via SBD. “No one envisioned a multibillion dollar industry, daily games, hundreds of thousands of people playing, billions of dollars at stake. And look, at the end of the day, we have poker, horse racing – you can get better at skills by practicing and studying up, but they’re regulated as gambling.”
Fantasy sports analyst Matthew Morgan thinks, “they’re shutting it down except for Kansas, Massachusetts, and New Jersey.”
Did daily league megastars FanDuel and DraftKings ruin it for themselves by becoming too big too quickly?
DraftKings was the single biggest advertiser on television from September 7-14 this year, airing 5,800 commercials costing upward of $20 million, according to ad tracker iSpot.tv. FanDuel put up similar numbers.
Both companies advertise heavily during national airings of NFL games, as well as sports, comedy, and news entertainment shows across broadcasting mediums, TV, print, radio, podcasts, etc.
The risk was that it might alienate viewers. Many Twitter users complained that they felt inundated with repeated commercials. Instead, hundreds of thousands of entries are made each week on each site and others, meaning the ads have been working, atleast to garner dialogue.
Both DraftKings and FanDuel have been able to spend so much thanks in part to recent massive investment rounds. Both are fresh off major funding involving big media companies: DraftKings having recently raised $300 million and FanDuel scored $275 million.
At this point, the best-case scenario for the industry could be the issuance of comprehensive regulations, which currently, daily fantasy sports betting does not have.
In 2006, online gambling was banned with The Unlawful Internet Gambling Enforcement Act of 2006. Similarly, daily fantasy sports betting is being considered a game of luck and potentially addictive, which is why the federal government has determined it is time to step in and take action.
At this point, the best-case scenario for the industry could be the issuance of comprehensive regulations, which currently, daily fantasy sports betting does not have. With specific regulations, the games could continue to exist. The worst case would be a decision by Congress to change its mind about fantasy sports, deeming the whole process gambling, and becoming illegal throughout the country.
Part of this problem could be addressed in the major companies’ advertising strategies.
Current ads feature surprised fans saying how easy it was for them to win at daily fantasy sports. A cursor is shown clicking down the list, adding some of the best players to their rosters as if on a whim.
The major daily league sites may also have perpetuated their own folly by inciting addictive tendencies, offering bonus incentives up to $200 back to match your initial deposit. Of course, you have to bet it to get it, and there’s some fine print on that too.
At least one DraftKings commercial indicates the level of research required to be a successful daily league player may be a more important part of the game.
Even if the federal government decides to allow fantasy sports to continue with its current regulations, the industry as a whole still sits under scrutiny. It is possible that states will join Nevada’s effort to protect its own legalized gambling operations, or at the very least get a piece of the action.
The daily sites may not even make it through the rest of the season. Fortunately for sites like DraftKings and FanDuel, they may get enough press over the next month or two to reign in hundreds of thousands of new players itching for one big win before it’s gone.
Good luck to the roughly 60 million people in the U.S. and Canada playing fantasy sports in week 7.
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