Allegations 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 Press, Former 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?
First, 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.
- 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.
From 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.