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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The Life of a Gambler: Easy Come, Easy Go

Poker Legends Doyle Brunson and Stu Ungar

Poker Legends Doyle Brunson and Stu Ungar

Las Vegas is a town defined by big gambles, spectacular successes and lost opportunities. A dealer once told me he had taken out a loan on his house to play a progressive slot machine at the Hilton. He and his wife, a cocktail waitress, had worked so hard for years to pay off the mortgage.

He said, “Robert, it has to hit.” It did hit, but it only got them even for the month they played. What if it hadn’t hit? Did he have a back-up plan? Was the long-shot of hitting a jackpot worth the very real risk of losing his home? I had a difficult time understanding his reasoning. Then I realized, there was no logic involved.

In my years of visiting and living in Las Vegas, I have seen how gambling can conquer even those who seem to be in control. The truth is a town like Las Vegas offers so many ways to knock you off your center and provide you with adrenalin rushes 24/7 that few gamblers are able to resist.

This is a perfect example. I remember the first time I ever laid eyes on Stu Ungar. He was walking from the Dune’s poker room with three women to the craps table, and I followed them. Stu bought in for $10,000 and placed his bets.

I watched in amazement as this kid with such a great reputation as a gambler began to shoot the dice. Stu lost it all, except for about $1,500 dollars. I will never forget what happened next. He took the last $1,500 from the tray and said, “This is for the boys,” and pitched the money across the dice table.

My thought was he is not a great gambler but a sucker with no regard for money. It is this “no- regard-for-money” attitude that makes or breaks great gamblers. How many gamblers really master self-control? In gambling, money can lose its value. In that regard, Stu was no different from your average gambler.

Another legendary gambler I have seen in action is Archie Karas, who is famous for turning $50 into $40 million, then losing it all. When Archie won all that money at the craps table, I begged him to invest in something for his future, but I could see in his eyes that it wasn’t his future he was thinking about during “the Run.”

Archie called me at the Bicycle Casino one Saturday morning and said he was going to play a $500,000 Razz freeze out with Johnny Chan. Archie beat Johnny, a player I consider to be in the top three of all time. Archie once told me, “Robert, look at all these players that have their pictures on Binion’s Hall of Fame. It should say Hall of Shame because I beat them all.” And he did; he beat Doyle Brunson, Chip Reese and Johnny Moss, all considered some of the best players ever to play the game. Archie is considered to be one of the greatest gamblers of all time—there certainly will never be another like him.

When I first started coming to Las Vegas in the 70s, I was playing poker at the Golden Nugget when an older gentleman dressed in a suit sat down. Different people kept coming up to him and congratulating him, so I assumed he was an employee of the casino.

He was playing very aggressively and drinking heavily. After playing for about an hour, he was approached by security and a couple of suits. They asked him to come with them. I was curious about what had just happened, so I asked about it the next day.

I was told the gentleman was a pit boss who retired after 25 years. The casino had a retirement party for him earlier that day. The problem was he had already lost $25,000 at dice that night, and rumor was he had not gambled in 25 years. Management intervened because it appeared he had fallen off the wagon.

I have been in the gambling business for over 50 years both as a player and as a marketing executive. I have seen it all. What drives most gamblers is the desire to make that score that will change their lives, so why then do they keep gambling even after they win life-changing money?

You can be successful in the professional world of gambling if you can master the art of staying in control of your bankroll and yourself. Like everything in life, it’s all about moderation. Know your limits before you start.

If you or someone you know may have a gambling problem, call the National Council on Problem Gambling’s toll-free helpline at 1-800-522-4700.

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

He has over 30 years experience in casino marketing and player development. Find Robert on Facebook at https://www.facebook.com/thechipburner and on Twitter @thechipburner. He can also be reached at robertturnerpoker@gmail.com for consulting and teaching.