By: William Zhang
Fantasy football is a football fan’s favorite activity other than watching the game. The hottest thing in fantasy football is daily sports betting. Daily fantasy is a relatively new format which was popularized in 2010 with the startup of Draftkings & Fanduel, the two biggest sites in daily fantasy betting industry. Similar to regular fantasy football where, participants select imaginary teams from among the players in a league and score points according to the actual performance of their players, daily fantasy allows you to draft a new team each week instead of being stuck with a team an entire season.
Chances are if you watch TV you’ve seen Draftkings & FanDuel. These two sites have appealed to many fantasy players with to the weekly cash payouts and “no-season long commitments.” Tens of millions of dollars entered in contests each week, in ten of thousand of leagues. FanDuel alone has over 1 million weekly users and expects to pay out $2 billion in prizes this year. Leagues range from 50/50 leagues where 50% of a league doubles their entry fee, to tournaments where the top prize is over a million dollars.
With so much money at state, Draftkings & FanDuel do everything in their power to maintain a level playing field. However, daily fantasy football has come under a lot of heat in recent weeks. Back on September 27, Draftking employee Ethan Haskell posted a picture of the how many people had chosen each athlete for an upcoming fantasy contest releasing the information earlier than usual. Later that day, he won $350,000 in a contest hosted by Draftkings competitor, FanDuel. Many people were suspicious, and thought Haskell had used insider information for his FanDuel contest. Insider information puts other contestant at a huge unfair disadvantage.
Although an investigation has proven that Haskell did not use insider information for his winning lineup, this incident has resulted in swift government backlash. The NYS attorney general opened an inquiry into daily fantasy sports, numerous states calling for robust regulations on a largely unregulated industry, and an FBI investigation on the legality of daily fantasy betting.
In 2006, the Congress passed a bill that banned online gambling. Major sports leagues, however, convinced Congress to exempt fantasy sports. Legally fantasy games are considered “skill-based” and not gambling, allowing Draftings and FanDuel to thrive. Many critics daily fantasy sites are more luck based than skill based. The fear is the FBI investigation launched last Wednesday will lead to new government regulations that make the industry less profitable or worse conclude that daily fantasy leagues are illegal under federal law that could force the sites to shut down this multibillion dollar industry. Nevada, the gambling capital of the US, has already ordered the sites to shut down, with many states following suit.
The fate of daily fantasy rests in the hands of the government. I don’t see the government shutting down these sites, they’re just too big. I do see strict regulation, or even taxation of the industry in the near future.
