Adam Kilgore wrote a lengthy article in the Washington Post recently describing the daily sports fantasy websites. This is a long-form piece but if you are interested in this subject, the article is well researched and well written. You can find it here.
The focus of the article is that the two main players in this arena – FanDuel and DraftKings – are exploiting a loophole in the Federal law that bars Internet gambling. The fact that there are loopholes in laws is not surprising or interesting to me; the fact that there are people smart enough to find and exploit said loopholes is not surprising or particularly interesting to me; the fact that the Feds who thought it was so important to pass a law to ban something for the public good cannot move quickly to close such obvious loopholes is not surprising or interesting to me. Here are some of the points made in this article that I find very interesting:
More than 3 million people play fantasy sports using these two web-based companies on a daily basis.
An estimated 41 million people play fantasy sports in venues other than these two daily fantasy sites.
Consider this paragraph from the article:
“On a typical NFL Sunday, FanDuel’s most popular game awards a $500,000 first prize to the winner of a massive pool with a $25 entry fee. Rather than simply hosting leagues for users, daily fantasy sports serve as an exchange. Players enter contests and win prizes for the best entries, and the Web site keeps a cut.”
Now, can you explain to me how this event is not equivalent to playing online poker or why playing fantasy sports on this different from betting on NFL sporting events?
MLB bought a financial stake in DraftKings two years ago. The NBA has a “partnership” with FanDuel. Since the two sites serve as an exchange in the sense that they take a small cut from every entry fee (call it a wager to be more accurate), that means that two of the major sports enterprises in the US are deriving revenue from wagering on their games along with other games.
MLB specifically lobbied in favor of the insert in the bill that created this loophole. The NBA, NFL, NHL and the NCAA all lobbied to pass the bill that created this loophole. In essence, all of these organizations supported a law that specifically makes a form of gambling on sporting events legal.
FanDuel has a “partnership” with the Orlando Magic in addition to its “partnership” with the NBA.
Even though I have exactly zero interest in fantasy sports – the season long variety or the daily variety – I find the topic interesting because of the mental gymnastics one has to go through when dealing with this topic. For example, they say fantasy sports betting is different from poker betting because in fantasy sports everyone starts with the same set of resources but in poker each player is dealt a different hand. Sounds good until you realize that is merely true if you set the level of your perspective. In poker, everyone sits down at the table with a stake (their wager) and the same deck of cards that will be used for the entire duration of the poker event. Once you resolve that dichotomy, you will know exactly how many angels dance on the head of a pin.
Another distinction is that fantasy betting is not sports betting because it does not depend on the outcome of any specific game. Again, that is literally correct but if you draft a team for a day in football and every player on your fantasy team is involved in a game where that player’s team wins 50-0, you stand a whole lot better chance of winning than losing.
My takeaway is that the pro sports leagues are already involved in gambling and some of that gambling is on games that their league puts on. Their players may indeed be playing fantasy sports and if that is not an apparent conflict of interest – a step below actual game fixing to be sure – then I guess I do not understand what a conflict of interest might be. To date, the NCAA is not part of this unholy cabal – but once the revenue streams are publicly known as they will be since these companies are seeking expansion funding, I am sure the NCAA will want to “dip its beak” so to speak. That will provide some fascinating mental gymnastics…
I mentioned recently that the latter-day Rosie Ruiz had been disqualified from the St Louis marathon. Greg Cote of the Miami Herald took that fact and juxtaposed it with some other information to come up with this:
“The St. Louis Marathon disqualified women’s winner Kendall Schler after determining she crossed the finish line but never ran the race. There also are now suspicions about the man who claims to have won, NBC Nightly News anchor Brian Williams.”
Finally, here is one more observation from Greg Cote that is worth your attention. The NBA and the NBPA have agreed on the protocols and procedures by which they will test players for human growth hormone and testing is slated to begin over the summer. That annou8ncment produced this remark:
“There is something funny to me about the NBA, whose typical employee is freakishly tall, testing for human growth hormone. It’s like the International Sumo Federation testing for body fat.”
But don’t get me wrong, I love sports………