Daily Fantasy Sports – New England, State by State

NFL Opener“DO YOU WANT TO WATCH SOME FOOTBALL?”

Draft Kings and Fan Duel both hope you do.  The NFL is when both Daily Fantasy Sports companies, who happen to control 95% of the DFS action in the United States, gear up for their busiest season.  Whether it is considered gambling or skill-based, daily fantasy sports and football together are extremely popular, to the point that most TV & radio sports stations include scheduled segments for each week’s analysis and picks.

FanDuel vs. DraftKings

FanDuel and DraftKings represent today’s online gaming options.

Not every state where DraftKings or FanDuel operate has expressly said daily fantasy sports contests are legal, and not every state where they’ve chosen not to operate has said it is illegal. In states where they don’t take paid entries, the companies still allow free entries (contests with no monetary prize), but that doesn’t interest many users.

NewEnglandFINALIn New England, all six states allow both Boston-based Draft Kings and New York-based FanDuel to operate.  And recently, daily fantasy sports became fully legal in the state of New York. An expensive process in the NY state legislature turned out positive for the two DFS giants. Now  both will be back online in time for the new NFL season, their most lucrative and crucial time of year.

Let’s look at DFS state by state in New England and how each state is approaching the legality of operation and regulation.  Much of the following information is from LegalSportsReport.com, a website covering global DAILY FANTASY SPORTS & SPORTS BETTING SITES INDUSTRY, edited by Dustin Gouker:

connecticut-welcome-sign-750

CONNECTICUT

A bill to give the authority to regulate the DFS industry to the Commissioner of Consumer Protection was introduced in February. The effort got a new wrinkle when it was added to a tax package for the state budget; the proposal would tax entry fees — not revenue.  The effort died after Attorney General George Jepsen said that the bill would jeopardize state revenue coming from tribal gaming. The legislature is now adjourned.

Rhode Island signRHODE ISLAND

In February, Rhode Island’s attorney general offered an opinion that daily fantasy sports is legal in the state while calling on the legislature to regulate the industry. However, the Rhode Island Lottery is now joining the legal debate over online fantasy sports, saying bills that would regulate the sites could prove to be unconstitutional.

Massachusetts signMASSACHUSETTS

Massachusetts is in many ways the epicenter of the DFS question, thanks in part to the fact that DraftKings is headquartered in Boston. That was confirmed when attorney general Maura Healey laid out regulations that will govern the DFS industry from a consumer protection standpoint, which she finalized in March. It seems unlikely that Healey’s regulations will entirely stop a legislative effort, as key lawmakers have expressed interest in licensing and taxing DFS operators, things that Healey’s regulations do not do.

downloadVERMONT

As a state not mentioned much on NETimeGambling due to its opposition to gambling, continued down that path when an official in the attorney general’s office said publicly that DFS amounts to illegal gambling in the state. Just before that, a regulatory bill was introduced. That bill passed the Senate but was not passed before the legislature adjourned.  It would seem that DFS in Vermont is teetering toward not operating in Vermont if the state follows previous policies.

New HampshireNEW HAMPSHIRE

The Granite State has had a history the past ten years of on-again, off-again casino interest. DFS operators have apparantly pulled out of New Hampshire, as well as Florida, Texas & Virginia, but no all for the same reasons. But according to RYAN RODENBERG’S article Daily fantasy sports state-by-state trackerNew Hampshire follows a “predominance test” in which the relative levels of skill and chance are measured to determine if the contest is permissible. No DFS legislative bill appears pending.

Maine signMAINE

According to a legal opinion letter released in the New York litigation, gambling in Maine requires a “bet or wager.” No legislative bill about fantasy sports appears pending. However, all, or almost all, DFS operators are active in the state.

The future seems to show gaining support in some areas, while major states like Nevada and New Jersey continue to categorize DFS as gambling, which both DraftKings & FanDuel vehemently deny. It seems the federal government is leaving it up to each state to decide what to do with fantasy sports.

Football Fantasy Leagues

Football Loves Daily Fantasy Leagues

To improve it’s image and stand on skill-based gaming (see our previous post Daily Fantasy Sports – Where did It Come From? Where Is It Going? ) DFS services have implemented changes to improve the fairness and transparency of their contests, including entry limits, banning off-site scripts, identifying veteran-level players, allowing users to block players they do not wish to compete against, and adding beginner-level contests intended for new users.

While we ramp up for the NFL season, NETG will continue to look at DFS. Tomorrow, we borrow suggestions by New England’s own Dan Podheiser.

Get those picks ready.  The NFL “Show” is about to start.

Binbin

 

 

 

 

 

 

Daily Fantasy Sports – Where did It Come From? Where Is It Going?


fantasysports1Allegations about the security of data and employees’ access to software started an avalanche of controversy for the fantasy sports industry. Before that, it had been largely smooth sailing for daily fantasy operators, which which began to grow in the wake of its exemption in the 2006 Unlawful Internet Gambling Enforcement Act, or the UIGEA.

According to Tim Dahlberg of the Associated PressFormer Rep. Jim Leach, the U.S. congressman who drafted the 2006 legislation making daily fantasy sites to pretend to be legal, and was signed into law by President George W. Bush. Mr. Leach also said, “lawmakers had no idea daily fantasy sports would “morph into today’s cauldron of daily betting…. (the) anti-gambling act was supposed to stop gambling on the Internet, not promote it.”

So what happened, and how did it all get to this point? More importantly, what is its future?

FanDuel vs. DraftKingsFirst, let’s get one thing straight – is it betting? FanDuel and DraftKings, the two most prominent daily sports fantasy companies, both promote themselves as offering games of skill, shying away from the label of gambling.  But, I contest that in is the same as Video Poker, Blackjack, and Poker which are games that also use skill for optimum strategy. And both have another thing in common – the element of chance. For example, a fumble ruling in the Lions/Seahawks game changed the winner of DraftKings Millionaire Maker contest from one player to another, in a matter of seconds.  Both fantasy players had no control, no skill, on this play and ruling just like a poker player’s odds changing completely due to one card on the “river.”

So, a brief look into its history, thanks to Rotogrinders.com, considered one of the leading Daily Sports Fantasy websites :

  • 2006 – The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) passed through Senate on September 30, 2006
  • 2007 – Fantasy Sports Live hosts its first public contests on June 22, 2007, changing the opinion and rules for fantasy sports as a daily, “non-gambling” activity.
  • 2007 – Instant Fantasy Sports is founded by Chris Fargis, a former poker pro
  • 2008 – After acquiring Instant Fantasy Sports in August, NBC quickly spun its assets into SnapDraft, positioned as “fast, easy and involving more strategy than a traditional fantasy league.”
  • 2009 – Now known as the most popular daily fantasy sports gaming site, FanDuel was initially started as a web-based prediction; switched gears in July 2009 to become a daily fantasy sports gaming site, launching its NFL product in the Fall of 2009.
  • 2010 – RotoGrinders becomes one of the first community and strategy sites to focus exclusively on DFS games, and becomes known for “Grinders Rankings,” a system that ranks and recognizes the best daily fantasy players.

    Football Fantasy Leagues

    Football Fantasy Leagues

  • 2011 – The 2011 FanDuel Fantasy Football Championship (FFFC) offered a $150,000 prize pool, which was an impressive jump from the $40,000 prize pool in the previous year’s event.
  • 2012 – DraftKings is founded in early 2012 and in 2013, DraftKings upped the ante for the 2013 NFL season by putting a guaranteed $1 million up for grabs across a number of Week 1 contests during their 2013 Kickoff Bash. While the $1 million in prizes was spread out across contests, the industry had finally grown to a point where seven-figure payouts were now possible to start a season and not just finish them.

Playing Fantasy SportsFrom this point, the payout curve gets steeper and steeper.  Sports giants like ESPN begin programming fantasy sports programming, as well as radio and sports talk shows, fanning the flames (no pun intended) to the unbelievable following it now has.

Getting so big so quickly has started another fire under the political machine whose interest is to keep online gambling out of the U.S., as the intention was with the UIGEA.  But is it legal?

Anti-trust laws and the policing of the DFS sites employees (concerning “Insider Trading”) could be cited as a problem, as well as the Federal Trade Commission looking at anti-competitive practices by FanDuel & DraftKINGS, consumer protection laws and the banning DFS betting by states as an unregulated industry.

If you are a player in DFS, enjoy it now.  Either it will go the way of internet casinos (gone), or become extremely regulated with sports betting, as in Nevada.

Binbin