88 / 100
88
// PUBLIC GAMING INTERNATIONAL // September/October 2016
court rejects new jersey’s
bid to legalize sports
betting
New Jersey’s most recent attempt to
legalize Las Vegas-style sports betting
was rejected by a federal court, a deci-
sion that may lead state legislators to
consider multiple options. New Jersey
lawmakers could:
• Petition the U.S. Supreme Court to
consider the case
• Pass a different bill that complies
with existing regulations
• Legalize sports betting outright with
no oversight by the state
A legal expert on matters related to
sports betting said that New Jersey
could force the hand of the National
Football League, the National Basket-
ball Association, and the U.S. Con-
gress to lift the ban on sports betting
in most states.
NBA Commissioner Adam Silver has
offered support for federal oversight
that would allow states to offer some
form of sports betting. Many sports
leagues and franchises have formed
partnerships with daily fantasy sports
sites, where competitors pay an entry
fee with an opportunity to win thou-
sands of dollars by choosing players
from a variety of teams. States have
differed on whether such contests
constitute sports betting.
new york lawmakers vote
to legalize daily fantasy
sports games
maryland state’s
comptroller wants to
improve daily fantasy
sports regulation
dfs operators win
legal fight, but profits
remain elusive
The two largest operators in daily
fantasy sports—FanDuel and Draft-
Kings—may have survived legal
attempts to shut down their opera-
tions, but an even bigger challenge
remains: becoming profitable. Both
FanDuel and DraftKings lose money,
although neither has disclosed how
much. CEO Nigel Eccles acknowl-
edged that FanDuel is under pressure
from investors to become profitable.
“We are not profitable today but we are
moving towards profitability, and we are
sufficiently funded to get to profitability,”
Eccles said.
He downplayed reports about a possible
merger between FanDuel and DraftK-
ings, saying that the companies would
not realize savings on legal costs and
multiple state lobbying efforts because
they already share such costs. Regulators
also could prevent a merger of the two
companies on antitrust grounds.
Both companies have reduced their
advertising spend. Last year, they
spent more than $300 million on
television advertising, according to
iSpot TV. This year, FanDuel has
spent about $1.2 million on TV
commercials, compared with $12.7
million during the same period in
2015. DraftKings’ ad spending has
decreased significantly, to $3.09 mil-
lion from $32.2 million.
The fantasy sports industry’s busi-
ness practices came under scrutiny in
late 2015 when the New York Times
reported that a DraftKings employee
had won $350,000 playing on Fan-
Duel. A later investigation found that
the employee had not done anything
wrong. But the incident caused state
officials to investigate the companies’
activities. With its recent legal victory
in New York, the DFS industry ap-
pears poised for growth: an estimated
60 million people play fantasy sports.
is fantasy sports a level
playing field? top 1.3%
of players take over 90%
of the winnings!
According to an article in Tech Insider
(October 2015) fantasy sports, par-
ticularly DFS, is projected to be worth
$14.4 billion by 2020. According to
the same article, most players will lose,
as 70 percent report losing money
every month, and the top 1.3 percent
account for 91 percent of winnings.
maine legislature to
consider regulating
fantasy sports gambling
Maine will join the growing number
of states that will consider legislation
next year to regulate fantasy sports
gambling. Maine Attorney General
Janet Mills says the state’s criminal
code is ambiguous about whether fan-
tasy sports betting is a game of chance
or a game of skill.
tennessee changes name
of state agency to include
fantasy sports
A Tennessee state agency has a new
name and new rules to handle a
General Assembly-passed law last
session that legalized fantasy sports
betting in Tennessee and regulates
it. The state Division of Charitable
Solicitations and Gaming is now the
Division of Charitable Solicitations,
Fantasy Sports and Gaming. The
Fantasy Sports Act of 2016, pushed
by gaming companies DraftKings and
FanDuel, legalized the companies’ ex-
isting gambling operations within the
state. Sports fantasy sites that allowed
wagering sought the law here and
in other states as a number of states
began cracking down on what by law
was illegal gambling.
■
U.S. SPORTS
BETTING
REGULATION