Regulators, legislators, and experts took their opportunity to weigh in on the debate between daily fantasy sports and sports betting at the National Council of Legislators from Gaming States (NCLGS) winter meeting Thursday in Fort Lauderdale, Florida.
“As we were looking for things to consider when it comes to the agenda and the most important things going on in the industry right now, I don’t know that there’s a hotter debate than what’s happening right now with daily fantasy sports,” said NCLGS president Shawn Fluharty.
Since the Professional and Amateur Sports Protection Act was overturned in 2018, sports betting has become legalized in 37 U.S. jurisdictions. And that number will continue to grow with Vermont launching on Jan. 11.
But where do daily fantasy sports sit?
Companies such as PrizePicks and Underdog Fantasy offer pick'em-style daily fantasy contests that differ from traditional daily fantasy games in that they’re played against the house. While these companies are thriving and their games are growing in popularity, they’re considered unauthorized sports betting in some states.
DraftKings and FanDuel – the largest sports betting operators in the country – want individual states to determine whether these pick’em-style contests are considered fantasy sports or sports betting.
“We’ve seen opinions in states, we’ve seen litigation, and we’ve seen some words exchanged between companies,” said Fluharty. “So, it’s something that I think is ripe for conversation and consideration.”
Despite the growing popularity of DFS, some states have added regulatory changes to the pick'em games, while others have gone as far as to classify it as a form of gambling.
“This has been a question in daily fantasy since the beginning of daily fantasy. How can you offer daily fantasy in these states when sports betting isn’t permitted?” said Matt Carey of Vixio GamblingCompliance. “The question is perception, it’s in the eye of the beholder. Some people see sports betting, some people see fantasy sports.”
An opportunity to educate
Those speaking on the NCLGS panel were in agreement that there appears to be an education gap on the issue.
Stacie Stern of Underdog Fantasy believes it’s necessary to have candid discussions with policymakers to find good, sound, legislative policy that regulators can then take and build into something substantive.
“But let’s not bury our head in the sand. If you take games away from people or contests away from people or don’t allow them to play, they’re going to go find something similar on their phones. It’s easy to do,” said Stern, Underdog's vice president of government affairs and partnerships.
She said joining the regulated market is the way to go and while Underdog would like to be regulated and taxed, getting such policy across the finish line has proven difficult in some states.
“I would love to be able to talk with lawmakers across the country to do one of two things. Maybe it’s an establishment of a fantasy sports law in a state that doesn’t have it, or maybe it’s talking about the modernization and updating of a law in a state that may have passed fantasy sports back in 2015-2016,” Stern told Covers.
But she’d like for the great daily fantasy sports debate to no longer be viewed as a fight against legal sports betting operators.
“I personally root for DraftKings, for FanDuel, and for PrizePicks, and obviously Underdog – all of us as competitors – to win over customers and continue to serve them with innovative and fun contests,” she said. “I hope that we can find a way to find that middle ground and come together as an industry and just be a stronger voice for the consumer.
“I think that we should be working together and we should be proud of what we’ve built over the years and that people get to play these contests that they love because we’re all pushing each other.”
