If one were to ask a fanatic sports fan what he/she does for a hobby, that fan most likely would say “Daily Fantasy Sports.”
Daily Fantasy Sports is basically where enthusiastic sports fans are able to compete with other sports fans through the means of online competition. Players contend with each other by building a roster of professional athletes and earn points based on the statistical performances of their athletes in live-action games. However, in Daily Fantasy Sports (DFS), entire seasons are accelerated which usually lasts for a single day or for a week. The reason for this is because players can receive some sort of profit from this. Players usually have to pay an entry fee to participate and build their team while also managing a salary cap for their team. Thus, prizes and other rewards are usually funded by these entry fees.
DFS has become increasingly popular in the last few years that two of the DFS services, Fanduel and Draftkings, are at a gross product of a billion dollars. These sites have become so apparent that according to Wired, “Fanduel and Draftkings air an ad on TV every ninety seconds.” Not only do these sites advertise themselves continuously on TV, but they are making agreements with many TV providers. In fact, Draftkings and ESPN have just made a $250 million agreement.
Although, Daily Fantasy Sports seems intriguing to many companies and fans, many in the public are arguing that it is a form of gambling and thus should be illegal. The debate has brought so much attention that New York State attorney general, Eric T. Schneiderman filed a lawsuit against Fanduel and Draftkings to stop functioning, implying that both sites are gambling and are violating the US Constitution. He believes that DFS is just “sports betting.” NFL Hall of Famer, Joe Namath, had similar thoughts. He said in simplest terms “If you have to pay anything to play and if you win something, it’s gambling.”
In order to combat this argument, both CFO of Fanduel, Matt King, and CEO of Draftkings, Jason Robbins, says that DFS isn’t gambling but a form of entertainment. Both are implying that it is not illegal and many states excluding Nevada have already allowed DFS permissible. Jin Qiu, 18’ offers some of his thoughts saying “DFS shouldn’t be illegal because it’s just another type of game.”
But what has left many in dismay is that a slim percentage of competitors actually win money. According to ESPN’s Outside The Lines, “91% of the profits won were by the top 1.3% of the players while 85% of the players were losers.” In addition, those who won were believed to have won because they are “skilled in statistics.” These astonishing percentages depict the unequal distribution of prizes among competitors as well as unfair competition.
Unfortunately for Draftkings and Fanduel, is that New York has recently ruled DFS as illegal gambling. This is a critical turning point in both sites because New York is the home of marketing and losing New York is a huge blow for both companies. In addition, now that New York and Nevada are among the first to rule DFS as illegal gambling, many DFS companies are worrying if this domino effect will continue to spread to other states.
As of now, certain precautions must be taken by both these companies in that prizes are distributed more evenly because without DFS, watching sports would be less thrilling and “dream teams” of many beloved sports fans would be destroyed.