Daily Fantasy Sports: Where Are the Regulators?

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The daily fantasy sports (DFS) industry was rocked by a scandal last week when it was revealed that Ethan Haskell, DraftKings’ written content manager, had mistakenly leaked player ownership percentages for his site’s Millionaire Maker prior to the start of some of that week’s NFL games. Haskell then went on to win second place and $350,000 in the NFL Sunday Million at rival site FanDuel that same week.

This incident has led to speculation that Haskell’s success may be attributed to his improper use of insider information. Though DraftKings bans employees from playing on their own site, there were no prohibitions from playing on rival sites—until the scandal broke.

As of Monday, October 5, both DraftKings and rival FanDuel released a joint statement which says in part, “We are temporarily restricting employees from participating in DFS contests as an interim measure while we work with the fantasy industry to develop and implement a more formal policy.” The key words here are “fantasy industry,” which points to the glaring fact that there is no outside oversight of this fledgling industry.

Even before this story broke, many were asking, “Where are the regulators?”

Fantasy sports benefitted from a special carve-out in the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which essentially sounded the death knell for online poker. Unlike online poker, fantasy sports holds a special status as the UIGEA classifies it as a game of skill stating, “All winning outcomes reflect the relative knowledge and skill of the participants.”

Launched only in 2012 during Major League Baseball’s opening day, DraftKings seems omnipresent now due to the fact that you can’t miss being bombarded by ads every time you turn on your television. The massive marketing budget is funded by the money flowing to the site from investors and players alike.

According to an article on Fortune.com called “Fantasy Sports Site DraftKings Takes Bets from More Big Name Investors” dated July 27, 2015, DraftKings announced a new round of funding worth $300 million lead by FOX Sports and the Kraft Group, owners of the New England Patriots. This round also included investment from the National Hockey League (NHL) and Major League Soccer (MLS) as well as the Madison Square Garden Company. Major League Baseball (MLB) also increased their stake in the company after investing an undisclosed amount in April 2013, becoming the first US professional sports organization to invest in DFS.

In addition to the funding, DraftKings has also benefitted from valuable partnering agreements. In April, DraftKings and Major League Baseball announced a multi-year deal making DraftKings the league’s “Official Daily Fantasy Game.” The agreement allowed individual teams to offer in-stadium fantasy-related experiences. And in July, DraftKings entered into a three-year advertising deal with ESPN Inc. valued at $250 million.

DraftKings seemed to be on top of the world claiming to have over 1 million registered players, the same position online poker held in 2006 at the peak of the poker boom. And in one fell swoop, the government seized the domain names of the three biggest names in online poker on April 15, 2011, the day dubbed “Black Friday,” and the poker industry has never been the same.

As I write this article, “a federal grand jury focused on DFS has been convened in Florida,” according to legalsportsreport.com. The US Attorney’s office in Tampa, Florida, is investigating whether DFS operators are acting in violation of the Illegal Gambling Business Act (IGBA). And the New York State Attorney General Eric Schneiderman has sent a letter to both DraftKings and FanDuel requesting the names of employees who had access to data that could have been used gain a personal advantage. The parallels to “Black Friday” are eerily similar.

This story is evolving with new developments seemingly every day. I have no idea how it’s going to end, but I do know one thing: It’s time for the gaming regulators finally to step up and regulate this new industry.

Regulators have a duty of care to protect the industry and public alike. It seems in this case they were asleep at the wheel. DFS is hindered by a lack of regulation and transparency. Players deserve a fair game. Like anything else in life, without trust, you have nothing.

Robert Turner is a legendary poker player and casino/billiard marketing expert. Robert is most well-known for creating the game of Omaha poker and introducing it to Nevada in 1982 and to California in 1986. He created Legends of Poker for the Bicycle Casino in 1995. He also helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development. He has served as an executive host at the Bicycle Casino and MGM. He is currently working as a casino consultant.

Robert can be reached at robertturnerpoker@gmail.com for consulting, marketing and coaching. Find Robert on Facebook at https://www.facebook.com/thechipburner and on Twitter @thechipburner. Subscribe to receive Robert’s articles as soon as they are published.

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Card Player Poker Tour Comes to Los Angeles Casinos by Patricia Chavira

Corey Silver, Tournament Director for Hollywood Park Casino, with the Heavyweight belt to be awarded to the winner of the Championship Event.

Corey Silver, Tournament Director for Hollywood Park Casino, with the Heavyweight belt to be awarded to the winner of the Championship Event.

The Bicycle Hotel & Casino in Bell Gardens, California, is currently hosting its annual fall tournament, the Big Poker Oktober in conjunction with the Card Player Poker Tour, which runs through October 14.

Beginning on Monday, October 5 and continuing through Thursday, October 8, a $200,000 guarantee No Limit Hold’em tournament will be held with two starting sessions each day at 12 p.m. and 5 p.m. The buy-in is $180 the first two days for 15,000 starting chips with 15% of the players qualifying for Day 2. On Wednesday and Thursday the buy-in is $235 for 20,000 chips with 20% of the field advancing to Day 2. There is a direct buy-in to Day 2 on Friday, October 9 for $1,100.

The $500,000 guarantee No Limit Hold’em Main Event has three flights beginning on Saturday, October 10 at 12 p.m. for $1,100. Players eliminated any day may re-enter the next day. Players can buy-in directly into Day 2 of the Main Event on Tuesday, October 13 for $4,300. The final table will be streamed at liveatthebike.com on Wednesday, October 14 at 2 p.m.

The Card Player Poker Tour moves to Hollywood Park Casino on Friday, October 16, for the National Championship of Poker, created by Gaming Today columnist Robert Turner in 1995. Turner says, “I am very happy that the new management at Hollywood Park Casino is continuing the tradition of the National Championship of Poker.”

Corey Silver, tournament director for Hollywood Park Casino says, “For the first time in two years, the National Championship of Poker will be back at Hollywood Park Casino. This prestigious event which started back in 1995 will feature 10 day of action-packed poker October 16-25 culminating with the $500 buy-in $150,000 Championship Event October 22-25. The Championship Event offers three starting days with the final day being played out on Sunday, October 25, for the world to watch via Card Player’s Live Stream Final Table.”

Preliminary events include single-day tournaments with guarantees ranging from $10,000 to $25,000 and offer different variations, such as No Limit Hold’em, Omaha Hi/Lo and Knockout Bounties. Winners in all preliminary event will earn entry into the $500 Championship Event. In addition, there will be last-chance Super Satellites Thursday, October 22 and Friday, October 23 at 7 p.m. for players to win their way into the Championship Event for as little as $60. Visit playhpc.com for more information.