The long con of daily fantasy sports
By Dan Heaning
Any sports fan whose turned on a game has been subject to a barrage of commercials from daily fantasy sport companies, FanDuel and DraftKings.
For those unfamiliar, daily fantasy sports allows users to buy into a league for a short period of time like a day or week instead of an entire season. After they pay the entrance fee, the users have an opportunity to win a predetermined pot or a share of it depending on the performance of their drafted players.
Daily fantasy sports have become a huge business in the United States. Those inescapable ads are just the tip of the iceberg. FanDuel, established in 2009, and DraftKings, established in 2012, have added more than $200 million in ad sales for TV networks like CBS, Fox, and NBC, ESPN and the NFL Network, according to a report by
It was also said in the same report, the two fantasy companies have contributed nearly half a billion dollars in advertising for sports across all networks.
In turn, the two companies receive heavy investments from those networks and leagues. The National Basketball Association, Major League Baseball, National Hockey League, and Major League Soccer are all investors in either FanDuel or DraftKings with NBCSportsVentures, ComcastVenture, Fox Sports, Time Warner, Turner Sports, and GoogleCapital all investors as well.
This doesn’t even include the undisclosed NFL and NBA owners who are invested in the companies as well. So it’s safe to say, that every American sports league and many networks have embraced daily fantasy sports and their cash flow.
And why not? FanDuel is worth $1.3 billion and DraftKings worth $1.2 billion, according to the Wall Street Journal.
But all of this has come at an expense. The expense of the customer.
Insider trading may have allowed a DraftKings employee to win $350,000 on the competing FanDuel site. This news sparked a still continuing chain of events including a reactionary ban on employees from playing on other daily fantasy sites.
Now, according to DeadSpin, maligned customers are reacting. Adam Johnson of Kentucky demanded a trial jury and class action status in his suit against both companies for negligence, fraud and misrepresentation, unjust enrichment, and violating state consumer laws.
While Johnson only admits to spending $100 on the sites. There are others who have lost far more and it should open the discussion as to why daily fantasy sports isn’t considered gambling.
Take the ThinkProgress’s story about a FanDuel customer named “Jay” into account. A recovering gambling addict, “Jay” spent 18 months away from gambling with six years of counseling under his belt. He saw the ESPN commercial and decided to join. He spent $200 initially then signed up for DraftKings and went back and forth between the two from some time.
In the end, he wound up losing about $50,000.
But the allure of daily fantasy sports is that it isn’t gambling. It’s a game of skill. That if you lose, you simply need to do more research. You have to try harder.
However, injuries, sudden cold streaks, and off-the-field issues aren’t things a fan can easily research and calculate. Could anyone guess that Tony Romo would be injured so soon into this season? And isn’t that just a big a gamble as just trying to guess who will win the Texans-Colts game?
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So why isn’t DFS considered gambling?
ThinkProgress explains that in 2006, the Unlawful Internet Gaming Enforcement Act explicitly allowed fantasy sports as long as the prizes are known upfront and winning is determined by the person’s skill and knowledge of the stats.
Therefore, according to the UIGEA, the two sites have still done nothing wrong. But that’s a matter those who drafted it not anticipating the long con that fantasy sports would become.
With DraftKings and FanDuel employees only having been banned from playing in competitors’ leagues a day or so ago, it seems that the competition in daily fantasy sports was skewed to those on the inside.
The game was rigged from the get-go.
And what you’re left with is people like Johnson who feel cheated and want retribution. You’re also left with people like “Jay” who are trying to recover from an addiction but are bombarded with gambling ads on TV and have lost large sums of money on fantasy sports.
Whether or not someone wants to consider gambling wrong or not, it has been called disruptive to the integrity of sports by pretty much every American sports league. But at least when you walk into a casino in Atlantic City or Las Vegas, you know what the deal is. You’re going to gamble and potentially lose some money.
The problem with daily fantasy sports is that they tell their customers that it’s their fault they lose. It’s a game of “skill” rather than a gamble. And the barrage of commercials make it seem like it’s so harmless. It could be you who holds this giant check, their equivalent of the Lombardi Trophy or Stanley Cup.
All this time, the game has been rigged against the very people sites like FanDuel and DraftKings entice with promises of big cash prizes.
Except, when the game is rigged the only fantasy is winning. DFS companies are the dealers, except they were allowed to pick their own cards and count yours. Which can also be considered a “skill.”
All DraftKings and FanDuel did was prove all of their detractors’ points because, just like gambling, nobody beats the house.