Daily Fantasy Sports: Rising Industry with Problematic Legal

Incredible revenues are projected by the leading companies in the daily fantasy sports industry in US.

The trend of increasing the popularity of the fantasy games in the United States seems to be taking serious dimensions. What was once just a hobby of several enthusiasts has been converted into a multimillion dollars industry. Nowadays, as online gambling sites in the US stress, the most famous modifications of fantasy games are the daily fantasy sports games (DFS). Gamers choose players, make their own teams and compete in a League, earning in the same time an incredible amount of money, immediately after the matches were played.

• Daily fantasy sports is a gambling industry on the rise
• Incredible incomes for FanDuel and DraftKings
• In US there seem to be no legal obstacles for DFS

In difference to the real-game possibilities, in the fantasy sports the gamer can make changes in the squad whenever he wants. This makes the dynamics of the whole fantasy League far bigger than the one we have in reality which makes the fantasy sport very attractive for most of the sports fans all over the world. Now most of the leagues in the US want to get involved in this highly profitable gaming industry.

The giants in the daily fantasy sports industry in US

One of the most popular websites that offer daily fantasy sports in the US is the DraftKings site which announced today that it has made a USD 300 million new investments, gambling news report. The funds are collected mainly from institutions like the Major League Baseball, National Hockey League, the Major League Soccer as well as from Fox Sports. The projections concerning the results from the investment are incredible. The DraftKings expect incomes of about USD 1.5 billion.

Many people considered these numbers as pure “fantasy” in 2012 when DraftKings was established. However the founders of the company Jason Robins, Matthew Kalish, and Paul Liberman belived in the new gaming-sector-to-rise. Their first outside funding was due to the investment of Ryan Moore in July 2012 which enriched their account for USD 1.7 million. Only three years later the DraftKings company announced it has a USD 250 million contract with the ESPN sports network. The focus of the DraftKings web site in future is said to be the promotion of fantasy sports on mobile app that supports iOS or Android. This according to their official will make a boom in the whole fantasy sports industry.

The biggest competition of DraftKings, FanDuel has also announced recently that it raised USD 275 million for investments. These money, as online gambling news in the US report, come mainly from the NBA as well as from a few teams in the league like the New York Knicks, Brooklyn Nets, and Chicago Bulls.

The daily fantasy sports are not like gambling

A great issue in the public, in the past two years, was the problem of categorizing the fantasy games. Should they be considered as gambling games? The NBA commissioner, Adam Silver, told in February this year that he supports legalized sports gambling, and the NBA’s investment in FanDuel goes in that direction. But does this means that the fantasy games are gambling games? The answer of this question depends of how one considers the games: are they games of luck or games of skills?

The US law is clear. The game is not considered as gambling if there is “an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any non-participant’s individual performances in such sporting events.” This makes fantasy sports sites like DraftKings and FanDuel perfectly US gambling laws.

The legal question seems to be out of any discussion. But what about the ethical? There is an ethical dilemma whether the leagues should become engaged with sites dealing more or less with sports betting. However, this issue with respect to the two greatest fantasy sports websites in the US is clear from a legal point of view. The real problem is made by smaller fantasy websites that offer not only fantasy games but also explicit online betting services. Their activities make many suspicious that the status of the fantasy sports in the US will remain the same in future.