For some time now, online gamblers have been able to take part in daily fantasy sports betting. In the United States, the activity is extremely popular. Members of such sites as DraftKings and FanDuel simply sign up and begin to take part. Members have the option to choose players for games taking place that very day. Once the players are chosen, the player can win cash or prizes based on the performance of the players chosen.
The activity is fun for sports fans as they can support their favorite players by choosing them or a favorite team to compete with. The daily fantasy sports business is one that is extremely popular, which means extremely profitable. Just recently, the activity came into question after a member of one of the DFS sites had made money on information already known from their own employer. This has spurred a plethora of investigations on the subject, with many changes on the horizon for DFS.
In Nevada, the change has been drastic, with regulators choosing to shut down DFS sites that are not regulated. To operate in Nevada, DFS sites must have a license to do so. Both DraftKings and FanDuel do not, so they have shut down. Both sites will be working to gain licensing but until then, will no longer be able to offer services. Any site that offers such activity will be punished under this new ruling by the Nevada regulators.
Also after the insider trading allegations, Eric Schneiderman, the New York Attorney General, decided to begin an investigation into the two daily fantasy sports companies. The federal investigation is only in the early stages but as it continues, it could have a big impact on the industry at large.
Daily fantasy sports do operate in a generally gray area, that is not regulated. Sites felt as though they had the ability to offer services in the United States. Companies that offer such services insist that the activity is strictly skill-based and they are exempt from the UIGEA, which prohibits online gambling from taking place.
DraftKings CEO, Jason Robins, stated that across most every state, skill games are classified in a different category than the games based on chance. Fantasy is not a game of chance as you are not throwing dice or guessing a number. If effort is really put in, and you really understand the sport better than the competition, the player can win on a consistent basis.
With Congress looking into the fantasy sports games, not only could the industry lose out but also sports teams. Many national sports leagues including Major League Baseball, Major League Soccer and the National Hockey League are investors in the industry, particularly with DraftKings.
It was once online gambling was named illegal in the United States back in 2006 that fantasy sports were created on the daily spectrum. Players will log on and create a team of professional athletes. Points are earned based on the statistical performance of the player. This is where the question of skill versus chance comes in. Are the participants randomly winning based on chance or are they using the skills they have of the sports industry to be able to create a winning team, earning points which result in major prizes?
This question remains and now both sites as well as additional operators will have to overcome legal hurdles to offer such activity. In the meantime, another site, StarsDraft, the offering of PokerStars, has also pulled from most states in the US due to the current legal investigations into the industry. It will be interesting to see what happens in the coming weeks with the investigations as well as operations of daily fantasy sports sites.
