The DraftKings Dilemma

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Nathan Albrinck

By Nathan Albrinck ’16, Sports Section Editor

Over the past year, daily fantasy sports have exploded in popularity. Through massive advertising campaigns, sites like DraftKings and FanDuel have become unavoidable. As these sites have grown, so has the controversy. In 2015, a DraftKings employee won over $300,000 on FanDuel, prompting investigations into insider trading. From there, the overall legality of the sites began to be discussed. State governments are beginning to take action. In eight states— Arizona, Iowa, Louisiana, Montana, Nevada, Washington, New York, and Illinois— it is illegal for residents to use these daily fantasy sports sites.

In 2006, online gambling was deemed illegal by the Unlawful Internet Gambling Enforcement Act. Contrarily, traditional season long fantasy sports were not ruled illegal by this act because they are considered games of skill. With the immersion of FanDuel and DraftKings in 2009 and 2012, respectively, the distinction between skill and chance has again come into question. Because of their brevity, daily fantasy sports are seen by many as games of chance. Amidst the questions, DraftKings and FanDuel stand by their product and their policies. Following the Illinois ruling to ban the sites, FanDuel released statement saying, “So why the Attorney General would tell her 13.5 million constituents they can’t play fantasy sports anymore as they know it — and make no mistake, her opinion bans all forms of fantasy sports played for money — is beyond us. Hopefully the legislature will give back to the people of Illinois the games they love. A sports town like Chicago and a sports-loving state like Illinois deserves nothing less.” In addition, both sites assert their products as contests of chance on their websites.

Top daily fantasy sports players have these games down to a science. The top players put off hundreds and hundreds of lineups each day, and they win massive amounts of money. As crazy as it sounds, the top 10 players on DraftKings and FanDuel average just under 900 winning entries per day. The top 100 players average over 300 winning lineups per day. For the number one daily fantasy sports player in the world, Saahil Sud, fantasy sports are his full time job. Sud spends $140,000 each day on lineups, with an average return of eight percent and annual earnings in the millions. Again though, it is hard to distinguish between whether he wins money because of his skill or just the sheer number of lineups he produces.

Within the Country Day community, reactions over daily fantasy sports are mixed. Many, including Bradley Dick ’16, believe they should be illegal. He feels, “Daily fantasy sports sites, most notably DraftKings and FanDuel, are clearly illicit forms of online gambling. Furthermore, professional sport leagues such as the MLB should not allow DraftKings or any gambling site to advertise or sponsor. In a league which makes so much noise against gambling, it seems almost hypocritical that the MLB allows such sites to advertise and sponsor.” On the other hand, Davis McMaster ’16 is in favor of the sites, saying they are, “transparent on how they make money and how you can make money. They don’t steal your money without you knowing.” Many others in the community disagree over the distinction of skill or chance.

In whole, the laws in place on online gambling and fantasy sports are not detailed enough to produce to one clear cut verdict on the matter. In the future, more states may outlaw DraftKings, FanDuel, and other daily fantasy sites as forms of illegal online gambling. For the time being though, these sites will continue to make money, and a whole lot of it.


Sources: http://thesportsquotient.com/nfl/2015/12/24/daily-fantasy-sports-ruled-illegal-in-Illinois

https://www.draftkings.com/help/terms

http://www.bloomberg.com/news/articles/2015-09-10/you-aren-t-good-enough-to-win-money-playing-daily-fantasy-football

http://www.adweek.com/news/advertising-branding/too-much-advertising-killing-daily-fantasy-sports-168069

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20151122-column.html

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