Have you ever reluctantly agreed to entertain the obnoxious friend of the person you have your eyes on? That person would not be anywhere near you if it wasn’t a necessary price to pay for greater good. Sometimes, the exact same thing happens in government. A bill has no chance to pass on its own. Recognizing this, it gets attached to another bill, one that is typically much larger and less controversial.
Daily Fantasy Sports (“DFS”) is a big smelly mess that threatens the middle class and their desperately needed financial security. The funny thing is… it all began with another measure that was intended to keep our people safe: port security. The Unlawful Internet Gambling Enforcement Act (“UIGEA”) was attached to a port security measure in 2006. Who would dare say ‘nay’ to port security, right? It would have not made it otherwise, but the UIGEA sailed through Congress under the wings of port security.
UIGEA itself was not the problem as much as its execution. Every new law had good intentions, but creates unintended consequences, especially when it is not properly vetted. When it came to UIGEA, there were no deliberations, no discussions. Its author said “No one ever conceived of it becoming a large scale activity or that it could transition into one-day contests.”
Some would say the rest is history. I guess that would be Nigel Eccles and Jason Robbins, CEOs of FanDuel and DraftKings, respectively. For the rest of us, and especially for the middle class, it’s the beginning of the end.
What Did UIGEA Do for Daily Fantasy Gambling?
NOTHING. It did not make daily fantasy legal. That was a lie that daily fantasy disseminated. Investors bought into it without much questioning. The troublemakers, FanDuel and DraftKings, boasted that they are 100% legal on the heels of UIGEA. Even liars get to a point where they totally collapse under the heavy weight of their deception. Recently, both operators retracted that statement, realizing such a blatant falsehood won’t fly anymore, but the damage was done.
Of course, even before they changed course to save face, the daily fantasy sports betting industry was speaking out of both sides of its mouth. Privately they acknowledged that state law would supersede UIGEA, hoping the states would give them an easy pass.
The States Did Not Play Along
That did not happen. States started declaring daily fantasy illegal under state law one after another. That created a real problem for DFS. Not only did they start missing out on significant revenue, but they also started feeling the exposure to criminal liability. The UIGEA was never a lifeline for DFS but that’s the blatant fraud they spread. Over time, it started to look like a death penalty. The UIGEA is not even the only federal law that can put DFS executives in jail. The Illegal Gambling Business Act of 1970 (“IGBA”) is another one. The key similarity is this: Once you violate the state laws, which DFS has and amazingly continues to do, federal laws can piggyback on those violations and create real trouble.
We the Further North
Quebec should be proud of itself. The second largest province in Canada by population is reportedly on the verge of blacklisting daily fantasy sports as an illegal gambling activity. Look at Canada as an outsider all you want. Sometimes it takes an “outsider” to see things more clearly.
“DFS is Gambling” Says a CURRENT Daily Fantasy Sports Operator
For a long time, we’ve been saying that daily fantasy sports is illegal gambling and that federal laws can put the daily fantasy sports executives in jail, but don’t take our word for it. Believe it or not, a current daily fantasy sports operator now agrees with us.
You heard that right. A current daily fantasy sports operator is saying that they are at risk of being charged for the same crime under the laws aimed at syndicated gambling and organized crime. If this was a proposed Hollywood script, it would have been tossed out… but not with DFS. The game goes on.
OF COURSE DFS Knew It Was Gambling All Along
The most amazing thing is that this is not even the first time a daily fantasy operator acknowledged it is gambling. Every step of the way daily fantasy operators tripped up and showed their true nature.
A CEO of a DFS site said DFS is like “a sports betting parlay on steroids”. Sports betting on steroids. Think about that.
Then Jason Robins (CEO of DraftKings) attached the words “betting” to the images all over the place on the DraftKings website. Elsewhere, he said the DFS concept is “just like a casino” and even pitched his company to investors as gambling.
Then, the Executive Director of Small Business of Fantasy Sports Trade Association declared that DFS is a bet, in front of the entire United States Congress, no less… just weeks ago.
Let’s see, by our count, the argument that daily fantasy sports is gambling is made by three daily fantasy sports operators and an entire association. This is just what surfaced… so far.
The chances are there is not a single person in the industry who thinks daily fantasy is not gambling.
Go Ahead and Put Your Entire Life Savings into Daily Fantasy
That’s what daily fantasy is effectively telling you. They argue “customers are not risking anything”. Bernie Madoff is probably having a good laugh at this.
Adam Silver, NBA Commissioner and one of the main proponents of DFS disagreed publicly, noting that “you are putting money at risk.” So did Jay Correia, another strong proponent of DFS, who authored a book titled Daily Fantasy Sports.
The only thing that stands between the ridiculous argument of customers not risking anything and that argument being publicly destroyed by the New York Supreme Court is the New York legislature.
Daily Fantasy Does Whatever It Takes to “Win”
It would be one thing if DFS showed some class and bowed out gracefully. Ah, sorry, you can’t expect class from criminals, can you? Instead, they kept spreading more lies and changing the narrative. Regulation, which was a no-no, all of a sudden became a desirable end game. But, nothing could be left to chance, so some questionable actions were undertaken:
* Contacting a college student so he doesn’t utter the “G” word to the media? Check.
* Snubbing the United States Congress when they were invited to testify? Check.
* Allegations of bribing the Illinois legislature which derailed the bill there? Check.
Russian dopers are angels compared to these guys.
Daily Fantasy Sports Abuses Traditional Fantasy Sports (TFS)
DFS treats TFS like an abusive son treats his mom, alternating between the need for protection when vulnerable and abusive behavior when not. In courts, daily fantasy is happy to align itself as closely as possible to traditional fantasy. Similarly, when they need the power of many or “strength in numbers” as the Warriors fans would say, traditional fantasy becomes a powerful ally. There are 56 million traditional fantasy sports participants in North America and a very small percentage of that is daily fantasy. “Fantasy Sports for All” sounds great when it’s time to send e-mails to the legislature.
When it’s time for legislative action, they don’t give a damn. One of the NY bills on the table (Pretlow’s) may kill traditional fantasy sports as we know it. In a lot of bills across the country, FanDuel and DraftKings are the only guys who can pay the steep fees. Who is paying for all this? I’ll let you answer that one.
Is it fantasy for all? Nah. It’s more like “We are in this together until I don’t need you anymore.”
Traditional fantasy sports – listen up! You thrived way before daily even existed and you will continue to thrive way after daily dies. Don’t get in bed with a deadly snake.
Are We On Our Way to Total Lawlessness?
Every house has rules. If our children violate them, they bear the consequences whatever that may be. As parents, we don’t change the ‘no hitting’ rule after our child beats up another kid, do we?
A well-functioning country operates the same way. There are laws. If people break the laws, they face the consequences.
Marc Edelman, Law Professor and a sports & gaming law expert said (from Correia’s book, Daily Fantasy Sports):
“Companies that jumped the gun in entering the ‘daily fantasy sports’ marketplace in violation of the existing state law should not be allowed to reenter – at least not for a period of time – and perhaps some of the worst gun jumpers should be prosecuted.”
DFS is illegal in New York, period. They violated the law, and they should bear the consequences. If they want to argue that daily fantasy is not illegal gambling under New York law, by all means. They already have an invitation to the New York Supreme Court in September, and pending legislative action by June 16, that’s where we’ll see them … going down.
New York, New York and “The Big Ugly”
Frank Sinatra sang “If I can make it there, I’ll make it anywhere.” That’s what DFS is hoping for, too, by conniving their way through New York to live another day.
DFS bills face lots of obstacles and now we are hearing that it may get attached to another bill. The ‘obnoxious friend’ situation. It even has an appropriately disgusting name: “The Big Ugly”.
Wake up, people! This is the approach that got us into this mess into the first place. We can’t do this again or the quicksand will suck us down the bottomless pit. It is time to stop this criminal madness and start anew with a sensible policy or daily fantasy will do what Dr. Octavius couldn’t do in Spider-Man 2… annihilate New York and then the rest of our country.
To be clear, DFS bills must be rejected in whatever form they come in front of the legislature. Be even more skeptical when you see it paired up with something good. It’s called putting lipstick on a pig. Would you kiss it?
Wrecks, Lies and Rape
* DFS will wreck our country and our economy
* DFS is raping our sports fans and innocent bystanders
* DFS is spreading lies, lies, and more lies.
Again – don’t take our word for it. Listen to a DFS podcaster and respected industry veteran:
“The idea that these sites exist so that regular guys can make a lot of money playing daily fantasy sports is a lie. FanDuel and DraftKings are optimized for power players to rape and pillage regular players over and over again.”