Is Fantasy Sports Gambling?

8 years ago
Is Fantasy Sports Gambling?
03:10
10 Oct

This week’s allegations of ‘insider dealing’ at DraftKings has seen the company’s CEO Jason Robins take to the airwaves to counter not only the breaking news story, but also the widely-held view that DFS is undeserved of its legal status while other online games – such as sports betting and poker – are widely prohibited.

Robins appeared on ESPN’s ‘Outside the Lines’ yesterday in the wake of the news that a DraftKings employee had ‘inadvertently released confidential data’ relating to NFL teams, and in the same week winning $350,000 from rival DFS site FanDuel.


The breach of security by employee Ethan Haskell has since led to a permanent ban on employees playing on any DFS sites while the Attorney General's office in New York has apparently launched an inquiry into the regulation of sites such as DraftKings and FanDuel, who are the 2 leading players in the Daily Fantasy Sports market.

Robins stated on the show that his own company had hired a law firm to conduct an independent investigation into the matter, the results of which DraftKings have promised to publish.

The CEO claimed that Haskell had “simply made a mistake”, and it had no bearing on the employees massive windfall through FanDuel. Haskell released data ‘which showed which particular players were most used in all line-ups submitted to the Millionaire Maker contests’, information which is usually restricted until all DFS players have submitted teams. Having this knowledge in advance is a huge edge, a fact which has prompted the ‘insider trading’ allegations and investigations.


Is Fantasy Sports Gambling?

DFS have profited greatly over recent months from being considered a ‘game of skill’, something which normal sports-betting – and online poker – have not.

When quizzed on such an ‘anomaly’ by sports lawyer Daniel Wallach towards the end of the show, Robins was quick to launch a defence:

“(DFS)…is pretty different, I think, from sports books, where even though there is some advantage that can be had, the edges are so minimal that it is primarily chance-based."

The example he cites is a reasonable one:

"If you randomly picked against the [point spread] you would be close to 50/50 almost every time. If you randomly picked a fantasy line-up and played against someone who put thought into it, they would beat you 9 times out of 10, if not more.”


However, poker also fails the ‘skill test’ according to the 2006 UIGEA Act, which describes it as a game of chance, despite everyone involved in the game being able and willing to provide examples such as Robins’ DFS one.

DFS sites have used this ‘legalised’ opportunity to spend $millions on advertising their sites and games and the leading companies now have valuations of between $1.5bn and $2bn, despite not yet having turned a profit. FanDuel has sponsorship deals with 15 of the NFL’s teams, while TV advertisements for both sites appear extensively during NFL broadcasts.

In light of the recent uproar, the NFL Commissioner Roger Goodell yesterday said that they would:

Q:“Continue to monitor the situation” when asked if there were plans to ‘reconsider their relationship with the DFS sites’. Consumer protection and making sure companies operate responsibly is important to us.”


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Andrew from Edinburgh, Scotland, is a professional journalist, international-titled chess master, and avid poker player.Read more

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