The Birth of Fantasy Sports Spawns Billion Dollar Industry

Americans are happy playing make-believe major league team owners loop-holing the US no-online betting law.

For the past twenty years, America has been enthralled by fantasy sports. Adults, men and women alike, play the role of make-believe online owners of professional sports teams. It could be anything from basketball or baseball but football is the sport having the largest share of this cultural phenomenon.

• Fantasy sports are a magical mix of fictive teams and real money
• ESPN, Yahoo, CBS Sports, and the NFL support Fantasy sports
• FanDuel and DraftKings may be encouraging illegal gambling

Sounds weird doesn’t it? But not so to the 30 million Americans who have created their own economy. The Fantasy Sports Trade Association had operating revenues of $ 11 billion last year. Some do it for pleasure with friends or co-workers. Others depend on the money it brings in and are dedicated full time. It is fascinating to football fans and to geniuses alike ‘who could never dream of playing the highly strategic, often brutal and peculiarly American game in real life’.

So these and others ‘fantasize’ with real money wagers in that very grey area of American laws, whereby betting on sports is illegal everywhere in the US except Nevada. Already its common knowledge that Americans do bet money on football games outside the four states, where gambling is legal, via bookmakers from these states. Authorities know but tend to let the habits slip by.

The birth of fantasy sports

Bettors found a kind of legal loophole in the form of Fantasy Sports. As the saying goes, ‘where there is will, there is a way’. Under the 2006 legislation, US gambling laws prohibit internet gambling. Any game whose skill is used to win money online is illegal. Any game won by chance is not, And that’s how fantasy sports was born, since sports are considered games of ‘chance’ and not games of ‘skill’, like poker is. But, whether Fantasy Sports is a cause or a consequence of the lack of regulated sports wagering outside of these states, is up for debate.

Each year, just around the start of football season in September, men and women gather around and shape fantasy football leagues. The players being bet on are from the National Football League. They are placed in fictional teams. Before the season starts, a fictive draft is drawn up with everyone choosing their players founded on last season’s performance.

This of course parallels the real life situation ‘like passing yards, runs, catches, and touchdowns’ which determines ‘the performance of the various fantasy teams in a league’. So, real wagers are merged at the start of the season. When the season ends, one week before the real season does, after all its ‘imaginary’, the lucky bettors get their share of money from the pool.

Why sports bodies and companies embrace fantasy sports

Don’t be fooled however, as both games of skill and of chance require scrupulous preparation and examination. Many sports entities like ESPN, Yahoo, CBS Sports, and the NFL itself, among others, invest in costly hi-tech platforms to support fantasy football league requirements. They need to justly allocate players among fantasy sports fans, ‘giving points based on statistical performance, and processing trades of players’.

But the sports bodies don’t complain. As ESPN’s head of fantasy sports, George Leimer, points out, when football season is on, fantasy participants visiting ESPN’s website up traffic by 17%. This means 90 million visitors worldwide are tuned into ESPN every month. ESPN is also the producer Fantasy Football Now, to tailor to the needs of fantasy leagues when it come strategy.

NFL has some of the largest numbers of fantasy sport’s fans out there. NFL mirrors their support by operating its own fantasy-football strategy program called NFL Fantasy Live, on its own cable network. Over 1 million Americans are currently engaged in ‘week-to-week fantasy leagues during the peak of the football season’ says analyst, Krejcik.

Companies, true to the American dream, are also taking their piece of the pie from the fantasy sports sensation. FanDuel and DraftKings, for example, run what is termed a ‘scale business’. Fantasy sports participants pay a small fee to be able to enter one-week long public leagues. Moreover, instead of playing with friends, participants bet against strangers for a much bigger pool of money.

Take FanDuel’s biggest public league, Sunday Millions, it promises a payout of around $2.25 million every weekend. Winners get $250,000 and there are smaller $50 cash prizes shared up to around 1,000 participants. If get enough people sign up each week, they make a good profit.

Fantasy sports’ ugly truth

So what is the down side to this too-good-to-be-true set up that has one million Americans mesmerized? Eilers Research reckons that ‘Americans spend over $160 billion on illegal sports and mobile casino gambling last year, 44 times as much as they did on legal gambling in Nevada”. It can thus be deduced that there is a chance for fantasy platforms to be able to deviate some of that money into their fantasy sports outfit.

Since companies like FanDuel make more profits if there are more people signed up each week, it’s also luring professional and serious gamblers to come in on the deal as well. Research shows that “an increasing number of high-volume players’ who indulge in internet gambling in the US are already having an unwanted effect on ‘casual user growth’.

This could result in more austere laws being implemented. Due in part to the climbing fantasy sports addiction especially when it comes to major league football. Arizona, Iowa, Louisiana, Montana and Washington—have all prohibited their residents from playing play in daily fantasy leagues.

Contrary to FanDuel and DraftKings, ESPN, despite being involved in season-long fantasy football, has tried to maintain a reputable image distancing itself from any kind of association with illegal gambling. Whichever way this vogue turns out, for the moment, with so much violence on the field in football and other sports, betting in fantasy games are seen as safer alternatives if not richer ones.