The Americans are participating in online fantasy sports industry in ever increasing numbers; the industry is shy of $4 billion per year at present, but it is expected to expand to $18 billion by 2020. The convenience of being able to place bets from the comfort of one’s home combined with the excitement of following actual professional league athletes makes fantasy sports very popular. Furthermore, the Americans are not legally allowed to bet on sports, and this is the only legal option available to them.
It is hard for sports enthusiasts to give fantasy sports a miss; the advertisement blitzkrieg from the main players in the business, DraftKings and FanDuel, is very effective and the thought of winning lots of money is very enticing indeed. In fact, some of the American sports leagues as well as their teams have very lucrative sponsorship deals with these companies as well.
The immense success of the online fantasy sports industry has definitely given rise to many concerns, especially with regards to its lack of regulation. There have been many allegations of insider profiting of late and this has affected the credibility of the business very badly. As a matter of fact, both DraftKings and FanDuel have responded to this scandal by banning their employees from participating in fantasy sports. What should get the industry really worried is that lawmakers as well as gambling industry professionals alike are questioning the very legality and validity of the fantasy sports wagering industry. There is massive opposition from the establishment to making online sports gambling legal, and there are growing concerns that fantasy sports, especially daily fantasy sports, is no different from sports gambling.
Jim Murren of MGM went so far as to call out the ambiguity of the situation and asked for the issue to be addressed on a national platform. It is easy to see why the casinos are concerned. They would indeed like to get into this business, but they are afraid that their casino gambling licenses might be forfeited if it turns out that they are breaking the law.
As far as fantasy sports companies such as DraftKings and FanDuel are concerned, they maintain that they are operating well within the law. They state that the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) that prohibits credit card companies from providing services to patrons of online gambling sites exempts skill based games, which is what they term fantasy sports as. The fact that the law came into being long before the true nature of fantasy sports was revealed provides these companies with a convenient loophole within which to operate.
The fact of the matter is that fantasy sports betting is a lot like stock trading in that professional gamblers make use of computerised processes that enable them to change a large number of line-ups in the blink of an eye to match last-minute changes on the actual playing field. In fact, Senators Hakeem Jeffries, (D-NY.) and Richard Blumenthal, (D-Conn.) are separately calling for increased policing of this multi-billion dollar industry.