A few reasons why I don’t like Daily Fantasy Sports
Ok, I’ll admit I’ve played in a few fantasy baseball leagues and even a football one over the past few years, however, I’ve never played Daily Fantasy Sports (DFS).
So many things surrounding the idea of them bug me – here’s the short list:
- They make people believe that they will “get rich quick”
- They charge people money to play – except for that first time so that hopefully (for them) you’ll get hooked
- They cater to the “gotta have it now” masses
- Their websites are not informative at all (whatever a beer slip-n-slide has to do with DFS is beyond me)
- The “industry” is controlled by just two main companies
- Gambling is a waste of money
The Daily Fantasy Sports Scandal
Now there’s been a scandal in the DFS multi-billion dollar industry that is monopolized by two companies: DraftKings and FanDuel. The companies have been under fire for the past few weeks for what is and should be considered insider trading. Now things are only getting worse for the two companies …..
Over the past week there have been disclosures that employees from both DraftKings and FanDuel, have won more than $6 million playing in the each other’s games. They’ve supposedly been using information they gained while on the job to give themselves an unfair advantage over regular players.
Of course at first the two companies denied it and have since temporarily banned their employees from playing in the other’s games, but that was when it was just a single DraftKings’ employee who won $350,000 playing on FanDuel during week three of NFL play. More have since been exposed and it has been acknowledged by FanDuel that their employees have won money on DraftKings.
Now that the information is public about the employees’ advantages and the money they’ve won, the number of lawsuits being filed are mounting. The FBI has launched investigations on both websites and four class-action lawsuits have been filed in New York, Massachusetts, Illinois and Louisiana.
Each suit requests full refund of all entry fees, actual damages plus interest and unspecified punitive damages. The suit in Louisiana takes things a “step further,” according to NBCnews.com, “accusing DraftKings and FanDuel of engaging in corrupt enterprises under the Racketeering Influenced and Corrupt Organizations act, or RICO.” Under RICO any damages the plantiffs were to win would be tripled.
In spite of all the turmoil, DFS remains completely un-regulated. They are pushing the boundaries of a 2006 federal law that prohibits online gambling but considers fantasy sports a game of skill. At the time the law was enacted, Congress did not see how quickly the industry would explode or how valuable its information would become and has now requested a hearing to examine the relationship between gambling and fantasy sports.
“I really think that if they had to justify themselves at a hearing they wouldn’t be able to,” said Representative Frank Pallone Jr., Democrat of the state of New Jersey.
On Friday, even the state of Nevada jumped on the anti-DFS bandwagon naming playing on either Draft Kings and/or FanDuel illegal, after conducting an investigation with the state’s attorney general. It is now seen as unlicensed gambling.
If you’ve seen the commercials, and you have if you watch sports, then you’ve likely seen where people can win up to $1 million in a single week. You’ve also seen how the company offers to match your first entry fee or allow you to play your first game free. In those cases anyone entering would more than likely not be in the competition where the top prize is $1 million as each site has different levels of competitions going on at the same time. They also say that if you finish in the top half of the people playing you will “win real money.”
Surprisingly many people will put up that amount of money to try and make more money, but the majority end up losing money. Hmm, seems exactly like gambling doesn’t it?
There’s not much skill involved whether you do a ton of research on statistics or not – because even the best player, say Mike Trout, does have days where he goes 0-4 or Clayton Kershaw might fall apart in the seventh inning. You can’t predict that a player won’t be injured mid-game like Tony Romo of the Dallas Cowboys.
Whether you play in a season-long league, the majority of which are played among friends and/or colleagues – you are infact taking a gamble on how these players will perform in their real lives. How they do in their real lives also ends up being dependent on other variables – the weather, injury, a bad week, they’re sick, a bad mood, etc.
The way I look at it, it IS absolutely gambling. What is the one single most important and fundamental rule of baseball? Um, you don’t bet on the games. If you’re a player/manager/coach or have any inside knowledge of the game you will be banned for life if caught gambling on the game and would have to join Pete Rose on the outside.
So how can the DraftKings/FanDuel employees ensure they have a better chance at winning? Well they have knowledge of the lineups of all the teams prior to the games, some set the prices of each player while others set the algorithms for scoring. They basically make the market.
The main allegation of the lawsuits against DraftKings and Fan Duel is that employees used their secret knowledge of which athletes DFS competitors drafted onto their fantasy teams to help identify the athletes they could then draft to build a team for themselves that would gain the most points and therefore be the most lucrative.
Employees of the two companies have inside information, data and analytics that are not available to the public, making it much more likely for them to finish at or near the top of the pack. Having this information is very valuable when daily entry fees are projected to take in $2.6 billion this year and are only expected to continue growing. The games need to be regulated and treated as online gambling. Without regulation of how this billion-dollar information can and cannot be used, how can anyone be assured a fair chance of winning?
The companies imply to the participant that by looking at statistics and reading what their “insiders” have to say on their websites will allow to gain enough knowledge to have a fair chance of winning. Without the information that the employees have it is hard to win. The odds are even less when you examine the contents on the sites.
Most of the articles are not even about the game like the FanDuel series done on WAGs (Wives and Girlfriends of athletes) or the one titled “Do you want to see the saddest on-side kick attempt ever? ” which is a video and a few words about a youth football team. Neither have anything to do with DFS, so in essence they aren’t even attempting to assist their customers in gaining knowledge of statistics unless all you need to count on them for is telling you who is injured.
The FanDuel Injury Page page currently has 25 articles and its News Page has 21 articles, ones that may actually relate to a player’s fantasy sports team or the lineup that they are going to make. Yet there are 574 like the ones named above, in a section called “The Bench.” Only people with a lot of money to spend, aka “whales” (again, sounds a lot like gambling jargon to me), and/or insider information have a real chance at “getting rich instantly” as the commercials say.
The DraftKings website provides even less information about the sporting events and athletes unless you “sign up” for the site which I didn’t really want to do so I don’t know what content is provided to those who do participate. It doesn’t appear to be much. The site just keeps explaining how easy it is to “win prizes.
A lot of things bother me about DFS. Mainly, I see it as a HUGE waste of money and the more we keep learning about this relatively new industry, the more suspicious of it I am. I mean if the state of Nevada believes that what you are doing is shady then it likely is. Just saying ….