Fantasy Football Downfall?

[BmillsSkier]

I was in a league for a dozen or so years, same 12 college buddies, going back to when the league commish had to tally stats via sportscenter each night after games.

I've been out for a while now and understandably the game has passed me by. This 'scandal' is very interesting to say the least.

A decent CliffsNotes synopsis:

http://gearpatrol.com/2015/10/07/dra...dal-explained/

The End of a $2.6 Billion Industry?


There are fantasy football problems — like starting Marshawn Lynch when he’s injured. And then there are fantasy football problems — like two major daily fantasy football sites being investigated for insider trading.

The news broke this week that an employee at DraftKings, Ethan Haskell, won over $350,000 playing fantasy football on FanDuel, a rival site, in the third week of the NFL season. That same week, that same employee had “accidentally” leaked company data “before the lineups of all NFL games were locked in,” according to a New York Times report. In a joint official statement, DraftKings and FanDuel reportedly denied that their employees were guilty of insider trading — which Daniel Wallach, a sports and gambling lawyer at Becker & Poliakoff, called in a Times article “the single greatest threat to the daily fantasy sports industry.”


It’s not surprising that many employees who work at fantasy sports companies like FanDuel and DraftKings also play fantasy sports. It’s also not surprising that they’re not allowed to bet on fantasy sports on their own company’s website. But nothing, as of now, is preventing them from betting on other like-minded sites. This is controversial because employees are setting the prices of players and algorithms for scoring that are not released to the public, and may be alike with other daily fantasy companies. And now, according to the Times‘ latest article, the New York attorney general is asking both DraftKings and Fan Duel some serious questions.

This year, daily fantasy football betting sites will generate around $2.6 billion in entry fees, according to a Eilers Research report. In 2020, they estimate it’ll reach over $14 billion. The growth comes down to a basic change from traditional fantasy sports run by companies like ESPN and Yahoo Sports — where players draft one team, in a capped league, for the entire year, for free — to daily fantasy football — where players can draft a new team each week (or day), and can draft any football player they want, depending on how much they’re willing to pay directly to the league.

Part of the draw of daily fantasy leagues is that they allow participants to draft (arguably the best part of fantasy football according to this DeadSpin article) a new team every week. But they are also eerily similar to sports betting, legal only in Atlantic City, Nevada, Oregon, Delaware and Montana, and cracked down on every where else, including the internet, since the 1991 passage of the Professional and Amateur Sports Protection Act. (Interesting to note is that in ’91, then-NFL commissioner Paul Tagliabue told a Senate subcommittee “We do not want our games to be used as bait to sell gambling. We have to make it clear to the athletes, the fans and the public, gambling is not a part of sport, period.”) According to DeadSpin‘s article, current daily fantasy sites use the same interface as some online casinos.

What complicates things further are the NFL’s and ESPN’s ties with sites like DraftKings and FanDuel, which run deep starting this year. As recent as last week, the NFL has invested in DraftKings to promote the International Series overseas, where gambling is legal; NFL owners Jerry Jones (Cowboys) and Robert Kraft (Patriots) have stakes in DraftKings, according to The New York Times; ESPN has an exclusive deal with DraftKings, part of which includes integrating “the company directly into ESPN programming,” according to Sports Business Daily. The recent scandal raises questions about not just the credibility of these fantasy sites, but also their relationship with sports as a whole. ESPN has reportedly already pulled some of its sponsored content — but not all. Like many others in the sports world, they’re tied preciously with fantasy football’s money. That all might come to a sudden halt, pending the New York attorney general’s investigation.

Wonder what happens from here, especially since the NFL has team owners, ESPN, and other key principals with literal money in the game?

My guess is the NY AG prosecutes these low level employees for what I'm assuming was perfectly legal when they did what they did, and the gov'ment gets their two pounds of flesh. That and when the winnings are erased the only ones making money are the attorneys (NTTAWWT).

[Sirshredalot]

I was in a league for a dozen or so years, same 12 college buddies, going back to when the league commish had to tally stats via sportscenter each night after games.

I've been out for a while now and understandably the game has passed me by. This 'scandal' is very interesting to say the least.

A decent CliffsNotes synopsis:

http://gearpatrol.com/2015/10/07/dra...dal-explained/



Wonder what happens from here, especially since the NFL has team owners, ESPN, and other key principals with literal money in the game?

My guess is the NY AG prosecutes these low level employees for what I'm assuming was perfectly legal when they did what they did, and the gov'ment gets their two pounds of flesh. That and when the winnings are erased the only ones making money are the attorneys (NTTAWWT).

The daily sites are a really new phenomenon. Their business model is basically as close to running an online sports book as you can get while still calling it a fantasy league. There were rumors that the big two were trying to go public with billion dollar valuations this year.

It'll be interesting to see how it plays out, but it feels like the online poker craze a few years back.

[digitaldeath]

Gambling is illegal unless state sanctioned

[matoco]

As someone who enters leagues on draftkings, these "fantasy football" websites are 100% gambling. They call it a skill game which makes them exempt to the gambling laws, but isn't it just as skillful to know what spreads to pick each week to win, or doing player prop bets on true gambling websites (which is essentially the exact same as fantasy football).

I have a feeling the scales are leaning towards legalization of sports gambling in many states or the entire country and these guys will simply have to make a few changes to their website, and they will already have all their clientele there that they have spent a lot of money to acquire. I don't think these sites are going away unless the become outlawed by considering them gambling, but some very big industries (NFL, ESPN, network stations) do not want to see all the money they are making go away which will have some significant influence.

[TomCrac]

With the NFL, ESPN, etc., directly involved, I'd be surprised to see it continue.

[wolfelot]

Fantasy sports leagues are dumb. A few years ago I was the new guy in the office so I said screw it, I'll join the office league. I did the draft and then never logged in again because it was boring. To each their own I guess.

[MakersTeleMark]

Bitcoins, pot, NCAA, and horses. Don't forget liquor.

[BmillsSkier]

With the NFL, ESPN, etc., directly involved, I'd be surprised to see it continue.

Maybe I'm misunderstanding but don't you mean you'd be surprised if it didn't continue? I mean, espn and nfl owners aren't in the business of investing in something that will soon disappear.

[that dude who did that thing]

Maybe I'm misunderstanding but don't you mean you'd be surprised if it didn't continue? I mean, espn and nfl owners aren't in the business of investing in something that will soon disappear.

I don't konw what TomCrac's point was, but the involvement of ESPN and NFL (and other pro sports leagues) makes it look not only like gambling but like the leagues are putting themselves in the position of "The House." So they make the product, they sell the product, and they make money (no matter what) when you bet on the product. That's the kind of control of the game that is only legal in Vegas, NJ, and on Indian reservations (with a few other exceptions of course).

[TahoeJ]

I'm sure the fucking morons in congress and the senate will ban it, so the companies will just migrate to the UK and pay their government a bunch of tax revenue instead. Like with regular sports gambling / online poker about a decade ago. Idiots.

[DBdude]

i hate the adds.

It is gambling. it was given an exemption under a 2006 law and is considered skill based gaming. when the law was passed in 2006, fantasy leagues where for an entire season as compared to what is going on now and not a billion dollar business.

i doubt they will put the genie back in the bottle.

[GeezerSteve]

Sure looks like gambling and the claim "game of skill" is a pretext to get it outside gambling laws. Congress has the power to regulate interstate gambling per the Commerce Clause, but historically Congress has usually deferred matters of gambling to state regulation.

+1 to DBdude's forecast. Big players have invested in the industry, and those big players also contribute lots of $$$$$$ to members of Congress.

[hutash]

Corruption in sports and gambling? I'm shocked I tell you, just shocked.

[TahoeJ]

Yep. MLB is a partial owner of one of them - I forget which. Kind of crazy when you think about it.

[GeezerSteve]

Not a bit crazy. Fantasy get-a-fucking-life-fer-chrissake sport players will watch more MLB, NFL and NBA, even if the game is a runaway. More viewers = greater share = higher ad rates.

[TahoeJ]

I meant crazy from a conflict of interest standpoint. I'm sure the NFL has a piece of the pie as well, albeit indirectly.

[DBdude]

nfl teams are directly involved

[Danno]

Aren't Jones and Kraft big investors?

[DBdude]

^yep

[GeezerSteve]

No conflict of interest. To the contrary, all those parties have a unified interest in extracting as money as possible from suckers playing boy pro sports team owner

[wolfelot]

So these guys winning huge bucks say $500k in a weekend like the commercials claim are actually putting up a thousands and thousands of dollars of their own money? If so going bankrupt from fantasy sports is a whole new kind of loser I have never thought of.

[My Pet Powder Goat]

No conflict of interest. To the contrary, all those parties have a unified interest in extracting as money as possible from suckers playing boy pro sports team owner

Dude. We get it. ...no one cares that you don't care. Stfu already.

[BmillsSkier]

I don't konw what TomCrac's point was, but the involvement of ESPN and NFL (and other pro sports leagues) makes it look not only like gambling but like the leagues are putting themselves in the position of "The House." So they make the product, they sell the product, and they make money (no matter what) when you bet on the product. That's the kind of control of the game that is only legal in Vegas, NJ, and on Indian reservations (with a few other exceptions of course).

That's my take.

i doubt they will put the genie back in the bottle.

This too.

Aren't Jones and Kraft big investors?

Per the article cut and pasted in the OP, yes.

[::: :::]

the thing that bugs me about it is the sports media time devoted to fantasy sports
i just want to see the fucking game highlights or the preview analysis
i don't give a shit who you're picking to score fantasy points

maybe they can make "the ocho" into a espn fantasy channel and move all that shit to one place
and take the televised poker & video gaming with it

actually, there you go...more money to be had...make it a subscription channel!
(and then I can avoid it altogether)

[Bromontana]

Just another industry designed to transfer wealth from the foolish to the power hungry. The game is so meaningless it's hard to take the fraud seriously. R-i-g-g-e-d.