To paraphrase Chris Christie, the US is $19 trillion in debt, people are out of work and ISIS and Al Qaeda are attacking, but all anyone wants to talk about is daily fantasy sports betting. And the burning question on everyone’s lips is this: do games on sites like DraftKings and FanDuel constitute a game of chance, or a game of skill?
If it is the former, they are considered gambling and will be outlawed, but if it is the latter they will be allowed to continue via a loophole in the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA).
Fantasy Betting: Chance or Skill?
NY Attorney General Eric Schneiderman is one man that thinks they are a game of chance, and he has ordered the sites to cease and desist operations in the state. The Supreme Court meets next week to decide whether he or the sites are in the right. But one site that earns its living from sites like FanDuel and DraftKings has taken matters into its own hands by proposing a good old-fashioned wager.
Doug Norrie and James Davis, who run DailyFantasySportsRankings.com, have taken exception to Schneiderman calling daily fantasy sports a “contest of chance”. They say that if the Attorney General can beat a DFS pro – a shark, as they’re known in the industry – in a bout of contests, they will donate $100,000 to New York City Public Schools, or any other charity of Schneiderman’s choice.
The terms of the bet are as follows:
1) Attorney General Eric Schneiderman plays 100 contests (or, if he wants, a larger sample size) against a daily fantasy sports player of our choosing in a salary cap format game.
2) If Attorney General Schneiderman wins 50 or more of these contests, the $100,000 will be released to the general operating budget of New York City Schools or a charity of his choosing.
3) If the pro of DFSR’s choosing wins 60 or more contests (this should be enough to demonstrate that DFS is a game of skill, not of luck), then Attorney General Schneiderman will acknowledge that daily fantasy sports is a game of skill, and either A) retract his cease and desist order or B) admit that his cease and desist order is about something other than the absurd notion that daily fantasy sports do not involve skill.
As ludicrous as it sounds, the bet doesn't actually do anything to dispel that the average Joe may have no chance of winning, when competing against math geeks with hundreds of entries in what is promoted as a fair 'contest', and possibly against employees armed with information that would be classified as insider trading. This flies in the face of the onslaught of advertisements that promise anyone can win big overnight.
Gambling in a Contest vs. One Sportsbook
Deceptive marketing and possible insider trading scandals highlight the need for regulation for the nascent industry, and also establishes that at the end of the day, daily fantasy is really no different than straight up betting with a traditional sportsbook, and quite possibly as hard or harder to win long-term.
The insider trading that can occur in the fantasy arena is also markedly different than the scenario of bookies betting at rival online sportsbooks, as noted by Sportsbook Review in a recent editorial.
What Happens Next in New York
FanDuel and DraftKings will have their day in court on November 25 to determine whether they will be forced to shut down their websites in New York. The daily fantasy sports operators appealed to the NY Supreme Court after Schneiderman declared the games constitute wagering and issued a cease and desist order last week.
They hoped for a temporary restraining order, but this was denied by Justice Manuel Mendez and they now await their fate next Wednesday, the day before Thanksgiving in the United States. Schneiderman’s ruling came hot on the heels of Nevada ordering FanDuel and DraftKings to halt their operations and apply for gambling licenses.
Online sports bettors at the SBR Forum have pointed out that if daily fantasy sports betting is to be legalized, then traditional sportsbook betting needs to be available in their backyards. New Jersey is attempting to allow sportsbooks to operate in Atlantic City casinos, a move that the professional sports leagues and NCAA vehemently oppose, while at the same time getting in bed with DFS, which looks and smells a lot like hypocrisy.