Category Archives: Fantasy Sports

Despite Supreme Court Ruling to Legalize State Sports Gambling, Florida doesn’t Seem Likely to See Such Gambling Expansion this Soon

Casino Watch Focus has reported on the ongoing efforts by New Jersey to legalize sports betting, including the news that the Supreme Court may have just put forth the largest expansion of gambling policy ever by allowing all states to now legalize it. For months states have been gearing up for this possible scenario and the sports leagues have likewise been in communication with state legislatures to ensure they see a piece of the new gambling pie. However, Florida may be one of the few states that wont see an immediate rush to capitalize on this new gambling expansion frenzy. The Florida Times Union online explains: 

in Florida, two major obstacles — a ballot initiative and the need for a special legislative session — stand in the way of joining states such as Mississippi and Pennsylvania, which have cleared the decks to allow gamblers to bet on professional and collegiate sports teams as soon as the NFL season begins in the fall.

A proposed constitutional amendment on the November ballot will allow Florida voters to decide if they want to control decisions about gambling, something now largely left up to the Legislature. If Amendment 3 passes, voters statewide would have to sign off on future gambling expansions.

Sen. Bill Galvano, R-Bradenton, who has been a lead negotiator on gambling issues for several years, said Monday the high court ruling won’t have an immediate impact on Florida, where sports betting is illegal.

Galvano and his House counterpart, Jose Oliva, R-Miami Lakes, last month raised the possibility of a special session to address perpetually elusive gambling issues but abandoned the notion after Gov. Rick Scott secured a yearlong gambling deal with the Seminole Tribe. The agreement is focused on the tribe’s promise to continue making payments to the state in exchange for “exclusivity” over “banked” card games, such as blackjack. A special session in reaction to Monday’s court decision is unlikely, Galvano said.

John Sowinski, the chairman of Voters in Charge, a political committee behind the amendment, called the court ruling another reason to support the proposed constitutional amendment because the measure would give voters a say in gambling activities. “A lot of people in Florida would be relieved to know that, if we’re going to have sports gambling in this state, it’s going to happen by design of Florida voters, not by Tallahassee politicians and gambling lobbyists,” he said.

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UPDATE: Supreme Court Strikes down Federal Sports Betting Ban, Creates ‘Wild West’ for Sports Gambling and Potential Devastation for Problem Gamblers

Casino Watch Focus has reported on the ongoing efforts lead by New Jersey to reverse federal bans of sports betting. After many failed attempts, New Jersey has finally succeeded in opening the door for them to regulate sports gambling. This obviously opens the door for every state as well, and the ramifications will be serious. In an op-ed piece published by the Hill, John W. Kindt, a professor of business and legal policy in the Department of Business Administration at the University of Illinois’ Gies College of Business, who for 20 years has focused his specialty research on the societal, business and economic impacts of decriminalizing gambling activities, outlines how such a reversal of policy creates a Wild West: 

On Monday, the Supreme Court issued its decision in Murphy v. NCAA, a case brought by the State of New Jersey to overturn the 1992 Professional and Amateur Sports Protection Act (PASPA), which was sponsored, ironically enough, by former Sen. Bill Bradley (D-N.J.), a professional basketball legend, to protect the integrity of U.S. sports. Trying to legalize sports gambling, New Jersey lost twice in U.S. district court and twice in the Third Circuit U.S. Court of Appeals between 2012-2014. In a perplexing move, however, the Supreme Court accepted New Jersey’s appeal and heard the case on Dec. 4, despite the recommendation of the Office of the Solicitor General advising the court to reject New Jersey’s appeal.

Generally ignoring the practical economic and social effects of enabling unregulated “real time” sports gambling, for example by kids on cell phones, a divided court decided “to destroy PASPA rather than salvage the statute” complained Justice Ruth Bader Ginsburg in her dissent.

The majority decision focused almost exclusively on New Jersey’s myopic arguments invoking the “anti-commandeering” principle of a 1992 case New York v. United States, while ignoring the obvious interstate impacts and the well-established Commerce Clause empowering congressional action on interstate sports.

While appearing innocuous to the uninitiated, the Murphy case will quickly generate ubiquitous and unregulated “Wild West” sports gambling. It is academically well-documented that this type of gambling is poised to explode with local and strategic economic impacts negatively affecting the U.S. economy.

While unlikely, immediate congressional actions regulating the practical impacts of the Murphy case are necessary.

While the Supreme Court cited the U.S. Gambling Commission’s 1999 Final Report, the court missed the Final Report’s numerous recommendations against gambling in cyberspace — particularly sports gambling.

Sports gambling in real time on cell phones and computers was highlighted as an example of the “crack cocaine” for hooking college students, teens and kids into addicted gambling. The Supreme Court also missed a wide spectrum of negative economic and financial issues associated with widespread sports gambling.

The complete editorial can be read HEREAdditionally, its important to understand this move might be the single greatest expansion of gambling seen by a single court case. The ramification of such explosive legalized gambling cant be overstated. A Press Release by the National Council on Problem Gambling explains their position: 

“Today’s ruling by the Supreme Court is the largest potential expansion of gambling in our nation’s history now that an additional 49 states have the opportunity to legalize sports betting. NCPG believes the expansion of legalized sports gambling in the United States will likely increase gambling participation and gambling problems unless steps are taken to minimize harm,” says Marlene Warner, President of the NCPG Board of Directors.

NCPG’s wide-ranging and deep experience in these fields since 1972 allows the organization to provide a clear-eyed perspective on both the benefits and pitfalls of legalized gambling, and to find a middle way that addresses concerns on all sides. Revenues from legalized sports betting must be viewed in the context of social costs. Research has shown that current gambling activity generates over $115 billion in overall revenue to local, state and federal government, but also results in $6.5 billion in associated costs, including criminal justice and healthcare costs. These costs are often hidden and difficult to see. Approximately 2% of adults experience gambling problems, or approximately 5 million people. These social and economic impacts must not be ignored.

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Florida Bill Seeks to Legalize Daily Fantasy Sports, but Might Violate the Seminole Gambling Compact

Casino Watch Focus has reported on the various attempts at legalization of Daily Fantasy Sports DFS), especially in Florida, a state that has been heavily lobbied due to major DFS companies DraftKings and FanDuel physically residing there. Last January an attempt was made to officially legalize, but it never materialized. New efforts have surfaced and have now passed committee. Florida Politics reports:

A proposal to exempt fantasy sports from state gambling regulation cleared a Senate committee Thursday—but with one notable opponent.

“I don’t think the issues raised are clear,” said Sen. Dorothy Hukill, a Port Orange Republican and vice-chair of the *Regulated Industries Committee, which handles gambling policy.

Aside from Hukill’s ‘no’ vote, that committee otherwise moved the bill (SB 374) by *Dana Young, a Tampa Republican, on an 8-1 vote. Similar measures (SB 840 223) have been filed for the upcoming Legislative Session.

In the online games, players pick teams of real-life athletes and vie for cash and other prizes based on how those athletes do in actual games.

Asked to clarify her position after the meeting, Hukill said, “Is this a game of skill or not? I don’t think that’s clear, at least for now.”

The issue isn’t as simple as legislation clarifying if it’s a game of skill or change and gambling or simple recreation. There is also the issue of the major gambling compact between Florida and the Seminole Tribe. They have issued a letter that clearly outlines they view Fantasy Sports as gambling and in violation of the compact and they have threatened to withhold payments to the state if such gambling expansion is pushed through by the legislature. On online source explains:

In a Tuesday letter to the state officials, the Seminole Tribe made it clear that the regulation of sports contests is to violate the tribe’s exclusive rights and the Seminole is to stop making payments to the state. The letter was signed by the Tribe’s general counsel Jim Shore and addressed to Sen. Travis Hutson and Rep. Mike La Rosa. The letter points out that the bill is to reduce the Tribe’s exclusivity. Furthermore, it states that the tribe is ready to discuss the issue with the state representatives. According to the letter, the bill is to violate Part XII of the 2010 Gaming Compact between the State and Tribe.

At present, the state reaps more than $200 million per year for granting gambling exclusivity to the tribe. Supposing that the state to tax daily fantasy sports contests, the tribe threatened to cease payments to the state. Industry insiders believe that the tribe’s warnings may change the officials’ stance on the matter and the DFS regulation may hit the rail. This seems to be the likely scenario as Florida is eyeing DFS regulation since 2015. Two years later, the bill is pending a stamp by the local government. 

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Billions in Illegal Gambling on Super Bowl comes with Serious Consequences for Many

Casino Watch Focus has reported on the significant amount of gambling on the Super Bowl each year, and each year the impact seems to grow. This year the amount of total gambling on the Super Bowl is estimated to be around $4.7 million. An online source breaks that number down:

Americans will bet $4.7 billion on Super Bowl 51 between the New England Patriots and the Atlanta Falcons, according to an estimate released Tuesday by the casino industry’s top lobbying group on Capitol Hill. That would 11 percent more than what was wagered on last year’s Super Bowl.

According to the American Gaming Association, only $132 million of the $4.7 billion will be done legally through Nevada’s casino industry. The 1992 Professional and Amateur Sports Protection Act banned traditional sports betting outside of the Silver State.

Many think gambling on the Super Bowl is harmless fun, and for some, who do it legally, it could be that simple. However, the consequences for others can be extreme.   A Fox News affiliate has reported that Super Bowl night is not only the biggest night for gamblers, but it also sees the most suicides as well.  For those that don’t suffer the ultimate fate, they can still lose enough to cause irreparable harm to their finances and family. Fox Now online explains: 

“Super Bowl is probably one of the biggest gambling days of the year,” said Gambling Addiction Counselor, Jim Harrison [a gambling counselor in Milwaukee.] He says the wagers placed on the Super Bowl are often not taken as seriously and can be seen as harmless and fun. “In reality it is betting, it is gambling,” said Harrison. Those compulsive gamblers see it as a day to make up for other sports losses this season.

Harrison says it’s not harmless at all for those with an addiction — betting is done with bookies and online and it could bring losses. “If it causes family problems, certainly financial problems,” said Harrison. “I’ve had clients who have literally lost over $300,000 gambling,” said Harrison. The Super Bowl can bring losses to those betting on it all, and it can be tempting to those dealing with gambling addition.

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Florida Legislator Attempts to Exempt Daily Fantasy Sports Industry from Gambling Regulations

Casino Watch Focus has reported on the ongoing path of newest gambling fad, daily fantasy sports (DFS). Many jurisdictions are viewing these daily contests as simple gambling given there isn’t the same skill level involved in playing with one drafted fantasy team over the course of a season and instead players pick a new team of players, most often with the ability to pick the exact same player, each day. Others have tried to pass legislation to call them games of skill and thus not gambling. Florida is a key jurisdiction given the major companies involved, DraftKings and FanDuel have corporate offices located in the state. Florida has sought to address the issue legislatively over the past two years, but with no true outcome. This session seems to be no different as a new Bill has been introduced that seeks to make DFS legal by exempting them from regulation. An online gambling site reports:

Florida state Rep. Jason Brodeur recently filed HB149, which would declare daily fantasy sports is a game of skill, not luck, thereby removing it from oversight by the Department of Business and Professional Regulation, which oversees parimutuels, poker, slots and other gambling.

Last year state Senator Joe Negron and state Reps. Matt Gaetz and Ritch Workman filed similar bills. The House Business & Professional Subcommittee passed Gaetz’s and Workman’s bill to allow and regulate DFS in Florida, but it died because lawmakers considered blackjack and fantasy sports to be gambling expansions.

Florida gaming lawyer Daniel Wallach pointed out, “In Florida it is illegal to bet or wager on both games of chance and contests of skill. So calling it a ‘contest of skill’ does not insulate the games under Florida law because wagering in those types of contests is also illegal. In my view, DFS would probably be considered ‘gambling’ under Florida’s broad test.” As a result, Wallach said, Brodeur’s bill is “a straight-up decriminalization measure that comes at a potentially heavy cost for consumers, with no regulatory oversight, and, even worse, no regulations unlike in other states.”

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DraftKings Sued for $4 million for Non-Payment of Advertising Deal

Casino Watch Focus has reported on the many woes of the Daily Fantasy Sports (DFS) industry. They have come under fire for being sports gambling and various legislation has been passed on a state by state basis. Some have banned it, others have regulated it. They were scrutinized for insider-trading type scandals and hacking vulnerability. They have been exposed for their role in being used by the NFL to market to kids and the risk they put on corporations that allow fantasy sports in the workplace. Now one of the two major daily fantasy sports companies, DraftKings, is being sued for over $4 million for not paying their bills and backing out of contractual agreements. Forbes Online explains:

DraftKings has been sued in the U.S. District Court for the Southern District of New York, with the plaintiffs seeking no less than $4.16 million in damages. The stated damages include $575,000 in alleged unpaid invoices as well as benefits that DraftKings is claimed to have received from an agreement that DraftKings entered into.

On April 4, 2016, after four invoices were past due, the plaintiffs allegedly contacted Robins via text and Robins responded ensuring that payments would be made. That same day, DraftKings Chief Financial Officer Janet Holian asked the plaintiffs to stop producing the DraftKings-related programming. A week later, Holian said that DraftKings would not be making any further payments.

The plaintiffs claim that they are entitled to additional damages based on DraftKings’ promise that it would execute a contract reflecting the totality of the deal terms as well as the expenses that the plaintiffs incurred (well over $1 million, per the Complaint) due to DraftKings’ promises. Additionally, the plaintiffs allege that DraftKings was enriched at the plaintiffs’ expense. 

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Fantasy Football Costs Employers a Shocking $17 Billion and Puts Companies at Legal Risk

As America enters into another year of the National Football League, gambling is set to take center stage yet again. Casino Watch Focus has reported on the emergency of daily fantasy sports as the newest form of sports gambling. Some jurisdictions have appropriately labeled it gambling and either outlawed its practice or regulated it accordingly. Other states have yet to make a formal proclamation about this form of gambling. But as with other forms of sports gambling, like NCAA March Madness  or the Super Bowl, the impact from such gambling will be felt in the workplace at home. Fortune Magazine has reported on the staggering amount of money fantasy football will cost employers, the results are nothing short of shocking:

According to Chicago-based employment research firm Challenger, Gray & Christmas, the sheer number of fully-employed fantasy football freaks could cost U.S. employers close to a whopping $17 billion (with a “b”) in lost productivity. That total eclipses the amount of total revenue the NFL took in last year, which was a mere $13 billion or so.

These numbers are hard to crunch, acknowledges Challenger, which came to this sum using the estimated 57.4 million people in the U.S. and Canada (ground zero for the NFL fandom) who play fantasy football, according to the Fantasy Sports Trade Association. The FTSA also estimates that 67% of those players (38.5 million people), work full time. And using U.S. Bureau of Labor Statistics data, the company estimated those players earn roughly $25.69 per hour, on average.

If you assume that to be the case, each hour spent poring over matchups and obsessing over results costs employers in aggregate $898.1 million in lost or unproductive wages. And assuming each player spends an hour of work time each week fiddling with lineups every week of the regular season, the total would come to $16.8 billion. 

Not all of this lost productivity is without employee consent as some workplaces even allow office pools and fantasy football leagues in which even senior members of leadership participate. However, just because some companies are aware of such activities, it doesn’t lessen the legal consequences when the gambling is deemed illegal. The Miami Herald explains:

Office pools and fantasy leagues remain a great way to bring positivity and fun to the workplace. Used properly, fantasy leagues can be a valuable team-building exercise, similar to an office March Madness pool during the NCAA tournament. Employers must be cognizant of issues related to gambling and increased work distractions, however. By creating an office pool or fantasy league, employers must be aware that creating such a pool or league may inadvertently encourage employees to spend part of their work day focused on their fantasy teams rather than work-related activities.

Employers must always be mindful of the potential impact on productivity in the workplace and ensure that any office pools or fantasy leagues are not out of bounds of the law. In order to ensure that employers are operating within legal boundaries, they should consult with an employment attorney.

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