Shot of Reality for DraftKings and FanDuel Fantasy

Published November 12, 2015 by Lee R

Shot of Reality for DraftKings and FanDuel Fantasy

A nine figure advertising campaign and major sports owners holding equity indicates a spurious backdrop.

The gray area has now officially hit the fan for fantasy sports megabrands DraftKings and FanDuel.

Fantasy Illegalized

The two largest daily sports fantasy companies in the nation were shut down by the attorney general in a cease-and-desist order to stop accepting bets from New York residents. The attorney general claims that the games of the two flourishing online entities constitute “illegal gambling under state law.”

The blow was delivered by current New York states attorney general Eric T. Schneiderman. New York of course is a trend-setting state, so the decision is likely to validate similar movements in other states with twelve more reportedly considering similar legislation.

Errors, Oversights and Rationales

Two things stand out here: first, the companies frontloaded advertising for sports betting activity to the tune of $100 million, saturating the market quite visibly, while also forming partnerships with sports owners such as Jerry Jones and Robert Kraft that were lucrative for the owners but also potentially infringe on the integrity of the sports themselves.

The rationale presented by the companies that fantasy sports are not gambling is based on the argument that Fantasy sports games involve more skill than luck and were legally sanctioned by a 2006 federal law exempting fantasy sports from a prohibition against processing online financial wagering.

The over reliance on rationale pervades the problems that the two companies have run up against. No matter what the justification or legal loophole or legitimization, you can't bet against the court of public opinion.

Public Never Blinked

People recognize sports betting for what it is, whether it is technically designated as gambling or not.

There are more contextual details available in other articles around the web, but the notion of sports betting remains a powder keg issue at best; just because you get a legal permit does not mean you change the public's mind; that leaves social movements afoot to thwart sports betting. Combine that with high profile major owners holding majority equity in the two fantasy league companies, and the entire infrastructure begins to look shaky from within.

Call It What It Is?

Maybe it is better to call fantasy sports gambling; at least, the necessary protections would be required of providers to protect against the stigma that will always linger in society: the addictive component. In the arduous and gradual process of wide-scale adaptation of online gambling, any perception that for-profit operators are exploiting or ignoring addiction will most likely result in a shut down.

Brands not Meaning to Abide

In response to the latest development, both DraftKings and FanDuel announced that they would not abide by the new order. 

 

Mentioned in this article

See also

DraftKings and Golden State Warriors Turning NBA into Party

Special Report: The Popularity of Fantasy Sports

Fantasy Sports Betting Grows In Popularity

Tottenham Hotspur Strikes Fantasy Football Partnership

Premier League Debut Ramps up Interest for Fantasy Sports


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