Casino Watch Focus has reported on the questionable nature of short duration fantasy sports betting. Also known as DFS, or daily fantasy sports, players no longer play over the course of a season, but instead pick players day to day. Given the short term nature, the question is raised about whether these are games of skill, or chance. Companies like Draft Kings and Fan Dual have gained in popularity, offering big gambling payouts but they don’t have the media exposure of a company like Yahoo. Now that Yahoo has decided to get involved in the DFS gambling market, people are taking a better look and realizing it’s a game of chance, thus gambling. An online gambling source reports:
When Yahoo does something, people notice. Daily fantasy sports has been the recipient of its share of news coverage as it has quickly*morphed from niche market* to an industry with billions of dollars involved. But Yahoo has upped the ante, in more ways than one. The giant publicly traded company is by far the *biggest entity* to jump into the DFS market, and what that comes more coverage. And *more* *scrutiny*.
Some of the biggest news organizations in the U.S. covered the DFS launch. Both stories refer to DFS as gambling — a designation the industry tries very hard to avoid. If mainstream media paints the picture in that manner, could it possibly be long before other people who matter — like politicians and regulators — begin to think the same way?
To best understand the debates taking place, its important to understand why any jurisdiction allows such games. There are two competing points of view, but it really comes down to game of skill or game of chance. Another online gambling site explains:
Online gambling was deemed illegal by the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006, but the act also prohibited sports betting, largely because professional leagues said it compromised the integrity of its games.
Fantasy sports, however, were exempt from the act’s oversight due to its description as a contest of skill over chance. *”Fantasy sports is a game of skill,” Kenneth Fuchs, vice presidentof Yahoo said. “We stay very close to the laws and we know that in 45 states this is legal and it’s fairly well established fantasy sports is a game of skill.”*
Not everyone agrees with Fuchs, including MGM Resorts CEO Jim Murren who said in April, “Absolutely, utterly wrong. I don’t know how to run a football team, but I do know how to run a casino, and this is gambling.” Traditional season-long fantasy leagues have been declared contests of skill due to the bettors required knowledge regarding who to draft, who to play, and when to trade.
Hopefully this form of gambling will be regulated appropriately. Companies are cognoscente of a potential gray area and are treading accordingly. For example, ESPN, a company owned by Disney, was reported to be investing in Draft Kings. They were quick to correct the story and set the record straight on the final deal which was restricted to advertising. Another online source explains:
Daily fantasy sports operator DraftKings will not be receiving investment from media group Walt Disney Co or its ESPN subsidiary. However, a report on website Recode says that DraftKings has been given exclusive rights to advertise fantasy sports on sports network ESPN’s properties starting in 2016.
Reports earlier this year suggested that Disney and ESPN were planning on investing $250 million (EUR223.7 million) in DraftKings, however it has been suggested that the fantasy operator is now in advanced talks to raise a large round of funding from other strategic investors.
The takeaway is that as popularity grows around daily fantasy sports betting, people are taking notice and figuring out how to react. Its just a matter of time before the gambling label sticks and regulation becomes necessary.
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