Special Sunday DFS Report

Special Sunday DFS Report

Matt HealeySunday,18 October 2015

Anyone who knows me knows that I play a lot of Fantasy Football. I am in 6 season long leagues, 18 daily fantasy spots (DFS) survivor leagues, 2 season long DFS leagues, and a bunch of 50-50s. While that may sound like a lot, I only bet about $400-$500 per year. Only 1 of the 6 season long leagues, “Too Much Time,” is a paid league, and it’s now in its 10th season. It is the one I care about the most. Additionally, I really like the survivor and season long leagues that Fantasy Feud hosts. In survivor, you pick 1 QB, RB, and WR each week but you cannot use the same player twice in a given season. The bottom 60 players are cut each week and if you make it to week 17 you make money. In the season long DFS leagues you play against the same people each week. It is kind of fun.

So, with this background, I have been watching the developments in DFS over the past two weeks. All of the problems started when Ethan Haskell (With a look that seams to scream, “I cheated and got away with it so what the fuck are you going to do about?“), an employee of Draftkings, accidentally sent out a tweet with the player ownership percentages for a large contest. That same week, he won $350,000 on FanDuel. The reason that this is a scandal is that ownership percentages are valuable information. If you want to win the million dollar prizes, you need to pick high scoring players that very few other people picked. If you pick the players that everyone else has, then you cannot gain an advantage. Further, since ownership percentages in the big contests tend to be similar across sites, knowing what they are on Draftkings gives you a significant advantage in FanDuel.

So, while it is still unknown if Ethan did anything wrong, it sure looks bad. The story got picked up by The New York Times, and the local legislators and public officials sprang into action. The New York State Attorney General opened an inquiry, Florida opened a grand jury investigation to determine if DFS sites violated Florida criminal laws, a New Jersey court of appeals has agreed to rehear a sports betting case, and The Fantasy Sports Trade Association has received a subpoena. Finally — and possible most damming — the Nevada Gaming Commission ruled that DFS is gambling and as such is prohibited in Nevada without a Gaming Commission license. The Commission then ordered all DFS sites to cease and desist all activities in Nevada.

So it looks like DFS is now entering the phase of either regulation or extinction. Until now, this has been a completely unregulated industry. The insiders have maintained that self-regulation is working fine and external oversight is unnecessary.

After all, what could possible go wrong with having the site operators self-regulate a billion dollar a year gambling venture? Do you really think that gambling would attract unethical behavior on the part of the companies and players? I mean it is not like the sites encouraged and accepted deposits from states where DFS is illegal and is part of the FBI investigation. Or that employees of the main sites identified new and inexperienced players and then went to rival sites, found the same user names and challenged them to one on one games. All of this has resulted in several class action lawsuits and a racketeering accusations.

So, when you are annoyed by all of the FanDuel and DraftKings ads today, just think, they may be coming to an end soon.

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