Could Fantasy Sports Suffer Its Own Black Friday?

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Friday, June 19th, 2015 | Written by Shane Larson

Over the past few years, the popularity of daily fantasy sports has grown exponentially in the US with the game attracting more and more players drawn to an unregulated industry where normal people can suddenly become millionaires. Needless to say, this situation has also started to attract the attention of the US government in a similar way in which online poker did a few years back, in the process raising the question of whether daily fantasy sports may soon be heading for its own version of Black-Friday.

DFS and Poker Similarities

There are numerous similarities between daily fantasy sports and the game of poker. Both are popular forms of gambling which entice masses of people to spend thousands of dollars online testing their individual skills. However, when the US Government passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, whilst internet poker was considered to be unlawful, the act specifically made an exception for fantasy sports, perhaps surmising that fantasy sports were just a passing fad, unlike gambling in general which is just a popular way to pass the time.

In addition, poker and fantasy sports are considered ‘games of skill’ with the two disciplines having the potential to generate huge prize pools, therefore making a player’s investment of both time and money worth while, that’s a given. Just like professional poker players, sport gamblers are keenly aware of the level of skill necessary in order to succeed in the game, with the various DFS bettors subsequently focusing on a wide range of players and teams, and in many situations betting against one another in order to obtain the best possible experience and outcome.

Internal and External Threats

Of course, the DFS industry might not be as professionally organized as its poker equivalent, but there is still a lot of money to be made from the game, even though numerous external threats may eventually dampen its meteoric rise. One such internal threat is that DFS may suffer the same fate as that of a mature online poker market, which after the Poker Boom (2003-2006) ended saw an increasing proportion of professional players scare the recreational player away.

In terms of external threats, anti-gambling interests are attempting to clampdown on the whole practice, with numerous anti DFS ideas currently being floated around in Congress. One such vociferous anti-iGaming opponent is John W. Kindt, a Professor of Business and Legal Policy at the University of Illinois, who recently spoke at a Subcommittee on Crime, Terrorism, Homeland Security, and Investigations, and suggested DFS should be included in the controversial piece of proposed legislation known as the Restoration of America’s Wire Act (RAWA). As Kindt mentioned in his prepared statement:

“Internet gambling is an issue of strategic financial stability and Wall Street regulation. It is not an issue of electronic poker, daily fantasy sports gambling, and other gambling methodologies—which are actually proposals to leverage gateways for legalizing various gambling activities throughout international cyberspace.”

DFS Has Many Supporters

Thankfully, right now the industry has some very good allies, with numerous leagues from North America having secured sponsorship deals with DFS companies. The same thing applies to the MLB, NBA and many others. Interestingly, the level of support for DFS coming from major sports leagues also shows a certain hypocrisy, too. After all, while they vehemently oppose legalized sports wagering outside the four states permitted under the Professional and Amateur Sports Protection Act of 1992 (PASPA), namely Nevada, Oregon, Montana, and Delaware, the sports leagues continue to support a fantasy sports industry which helps to create interest in their games. Therefore, should DFS betting be legal? Of course it has to be, since it’s quite similar to casino games, poker and sports betting, and rest assured that even if politicians might be worried for now, in the end progress will be made, and fantasy sports betting will become legal and regulated.