Daily Fantasy Sports

By Jay Correia and Jeff Mans

Daily Fantasy Sports, the book, explores the impact of fantasy sports in America today. Take a stroll in fantasyland and discover everything there is to know about daily fantasy sports. Learn about the legal challenges, how we got in this mess, and what choices the industry now faces in order to save fantasy sports. The author helps you connect the dots, all while keeping you entertained with thoughtful quotes, tips on how to play, and more.

• Language: English
• Publisher: BookBaby
• Release date: Apr 23, 2016
• ISBN: 9781483566375

Book preview

capitalism.

PREFACE

"We have 19 trillion dollars in debt. We have people out of work.

We have ISIS and Al-Qaeda attacking us, and we are talking about fantasy football?"

– Chris Christie (GOP Debate 10/28/15)

Unfortunately, the answer to that question is a resounding yes. What we have here, ladies and gentlemen, is yet another glaring example of our inept government and a massive failure to communicate. A poisonous concoction of greed and ignorance is being brewed in an attempt to stonewall the fantasy sports industry. The victims? A couple of unicorns named FanDuel and DraftKings, a plethora of rapidly growing small businesses, and your cousin Mike, who won $10 for picking Tom Brady last Sunday because TB12 dominated the Jets.

The time has come to take a deeper look at this cool and exciting thing we refer to as daily fantasy sports and to stop our government from creating, then falling, on its own sword in the name of supposedly trying to protect sports fans across our great country.

INTRODUCTION

Daily fantasy sports is the phrase used to describe an individual picking athletes every day or week to build a fictitious team so that he or she can compete in a game of skill against other users’ teams for cash, for prizes, or simply for fun. Those of you in the industry already know that. For those of you who see and hear all those commercials and ads, well, that statement pretty much sums it up.

More or less, the concept is simple. You create an account on a website or app, see the contests that are available for that day or week, join one, build a team using your skills and knowledge, then wait to see if your picks pay off. In a nutshell, that’s pretty much it. These daily fantasy games can be found on FanDuel, DraftKings, YahooSports, DraftDay, GoDraft, DraftOps, FantasyAces, FantasyDraft, DraftPot, StarsDraft, FantasyFeud, AlphaDraft, and roughly 30+ other legitimate businesses and counting. These companies, often referred to as operators, are simply the innovators and facilitators.

So where did fantasy sports actually begin? Well, there really is no exact answer to that question and I’m sure the facts are quite debatable. What we do know is that people used to play fantasy sports by manually choosing players and writing them down on paper. They would then communicate their picks to whoever the league commissioner was (the person who runs the league). That person then had the arduous task of manually reviewing the scoring results and determining winners and losers. Boy, have we come a long way! Today, it’s almost unimaginable to think of sports without fantasy.

Let’s be clear. Fantasy sports has helped grow all the major sports (NFL, MLB, NBA, NHL, PGA, NASCAR), as the very action of engaging in fantasy better connects the fan with the sport itself. It has also helped propel ad revenue to all-time highs, has helped spawn countless start-up businesses, and has given the average American something fun to talk about with their friends, family, and co-workers just about every day. So what really differentiates fantasy sports from daily fantasy sports? Not much, really. They have an awful lot in common.

Like all things, fantasy sports have evolved over time. The American consumers weren’t satisfied with the small serving size they were being fed, and thus, the advent of daily fantasy helped provide sports fans more of what they loved. With a traditional season-long fantasy league, an individual picks athletes to build their fantasy team for the entire sporting season. It almost always involves some type of buy-in to join and a prize of some sort at the finish line.

As you can see, aside from the daily part, the concept is awfully similar. So why is there a unique, growing hatred for daily fantasy sports? Unfortunately, much like the great Tom Brady, society always seems to want to tear down the successful. This is especially the case if there is a hint of unverified circumstantial evidence that suggests something might not be right. Save the children! Save the children from what? This isn’t gambling! Give me a break.

Ultimately, it really just comes down to money, like it always does. The government knows there is cash flying around and it wants to get its share. The humorous and equally disappointing aspect of this fact is that it doesn’t realize it’s already receiving the benefits! Ultimately, the government does what it’s good at – creating confusion, slowing innovation, and burdening businesses with more taxes and regulations. The path to hell always seems to be paved with good intentions and we are witnessing just another example of that age-old saying. As the author, let me be clear in making a few disclosures as you read on.

First and foremost, I am a New England Patriots fan so pardon me for the Brady references. They are pretty good, though, aren’t they?

Secondly, I am all for everyone playing by the rules and being transparent. I don’t think all regulation is bad regulation.

Lastly, I am an open-minded, logical, and pragmatic business-friendly Republican. This book was not written to impose views nor spout off political theory. Politics and sports don’t typically mix well (Google Search: Rush Limbaugh Rams), so I will keep the references warm and light. It is what it is.

The purpose of this book is to help better educate the public and those with political power about daily fantasy sports. It’s a rally call for being pro-business. It’s about standing up for innovation. It’s about protecting the little guy and asking our lawmakers to please take a chill-pill before jumping to any conclusions. If you are a heavy regulator, skewed lobbyist, suppressor, or socialist, you probably won’t find joy in reading this book, but everyone has a chance to repent! With that said, we don’t have time for lollygagging, so let’s get right to it.

CHAPTER 1

It’s a Game of Skill

As the Beastie Boys once said, I’ve got the skills to pay the bills.

Fantasy sports is not gambling, it is a game of skill. That is not an opinion. It is an easily provable and consistently repeatable fact. Gambling, by its very definition, involves nothing more than pure chance. For example, if you throw a six-sided die, it has an equal outcome as to what side it will show. That is a chance unless you are cheating. Period.

With fantasy sports, the situation is quite the contrary. You need to think about what you are doing in order to be successful. You need to look at statistics, weather, prior outcomes, injuries, and other variables that involve a decision-making process in order to establish a pick. Those that skillfully apply their knowledge to make picks will almost always win, as compared to the person who randomly makes choices.

Here’s an example of a skill-based scenario with daily fantasy sports:

I still need a quarterback for my team this week. The New England Patriots play the New York Jets. Hmmmm. That should be a fairly defensive game, given the fact that the New York Jets have a pretty solid defense and always seem to play the Patriots well, right? Well, let me think about this. How have these teams typically played against each other in the recent past?

Oh wow! According to http://www.footballdb.com/​teams​/nfl​/new-england-patriots/teamvsteam​?opp​=22 these teams seem to regularly put up 30+ points against one another. That’s not what I thought!

Well, before I pick the ever-reliable Tom Brady, let me see who else is available for the same amount of remaining salary. Oh. I can do Matt Ryan on the road against the Titans! The Titans aren’t that good. That’s a tough one. Well, it looks like it is going to be crappy weather in Nashville this weekend and from everything I’ve been following, I think Brady is the QB more likely to put up the 300+ yards and 3TDs I’m looking for.

[ add button pressed ]

Here’s an example of a gambling-based game:

This Flying Buffalo game looks cool and exciting. Let me sit down here and give it a shot. Hmmmm. Should I really put the $5 in the machine? I guess so. Why not? There is a chance I could win. I mean, I know all these machines are connected and the computer is going to randomly decide who wins and when it is time to win. I know it is all rigged to ensure a certain outcome, but okay, what the heck. What’s life without taking a chance? Darn. I lost. Let me do it again. Cool. I almost won my money back! Let’s do it again. That guy over there with the pretty blonde on his lap seems to be happy. Maybe they won. At least I’m still having fun. Maybe I’ll hit the craps table and throw dice if my next pull on this blinking buffalo thing doesn’t pan out.

As you can see, these two situations are easily distinguishable.

Despite the propaganda that some of those in Las Vegas may be trying to shove down your throat, fantasy sports is not gambling, it is a game of skill. Additionally, a user is not compelled when playing fantasy sports to play for any set amount of money. They can choose to play for free. They can choose to only play friends. They can choose to play in a private league (offered by websites such as GoDraft.com) in which the general public can’t even participate. They can choose to play for $1.00, $100, $1,000, and so on. The user understands the circumstances and what they are getting themselves into. Ultimately, it is the skills and choices made by the user.

So wait a moment. If daily fantasy sports are a game of skill, then why isn’t sports betting a game of skill too? Well, you have a point. Largely, the basic concept of sports betting is more along the lines of a skill-based game than a gamble. That is why there are odds. The point spread or money-line concept helps even the playing field to make it much more of a chance, not a game of skill. Furthermore, when you are dealing with a single event you also run into some reasonable issues (Google Search: Pete Rose betting).

With that said, I understand how one could make an argument that sports betting should also be legalized. That is fairly logical. As you continue to add additional games into the mix and end up with a betting parlay (a combo bet involving multiple games) the difficulty increases and the skill factor goes up. I guess it just depends on how you look at it. There are also additional complications when the house gets involved. Overall, the sports betting business crowd is kind of a mixed bag. On one hand, there are the Las Vegas power brokers who want nothing to do with outside legality. On the other hand, there are groups of businesses, like those in Atlantic City, looking to leverage technology and expand sports betting. They want it legalized. The irony behind the legalize sports betting argument is somewhat humorous. Many of the people who’ve been fighting to expand sports betting are largely the very same people who’ve been trying to bring down fantasy sports.

From a legal perspective, this is somewhat suicidal.

– Justin Fielkow (Fantasy Sports Attorney)

Why would someone want to tear down the very industry that could provide a path for getting sports betting legalized? It doesn’t make much sense. On the surface, it appears to be quite ignorant. Perhaps their view is nothing more than a scorched earth policy. They may simply be jealous and therefore they want fantasy sports to be destroyed too. When looking at the big picture, though, the legalize sports betting crowd is small. The gambling mecca we refer to as Las Vegas has a much, much louder microphone.

Let’s be clear. Las Vegas does not like fantasy sports. They claim that daily fantasy sports are nothing more than another form of gambling. While there may be some old and crusty casino operators who truly think this way, the people running the show very well know this is not true. They aren’t stupid. There is a major difference between playing in a skill-based fantasy sports contest and pulling a handle on a casino slot machine. So why does Las Vegas refer to daily fantasy sports as gambling? Here’s your answer: It’s called crony capitalism. Greedy billionaires would rather suppress their threats with corrupt lobbying efforts. They would rather make up new laws than give in to innovation. They don’t want to yield. They want you to yield. It’s the powerful versus the powerless. It’s another example of big business being in bed with the government to enforce their will and suppress small business. We’ve already cited who the victims are, though FanDuel and DraftKings may benefit, at least to some degree, with new regulation. Later in the book, we’ll dive into why this is so. We’ll also dissect the casino industry as a whole and further explore what I consider their stodgy