Sitting in my room on a Sunday in October, I turned on my computer and typed in the URL I had managed to evade for the past three months: www.draftkings.com.
I’m not a gambler. I’ve never been one and don’t foresee myself becoming one. The idea of putting the fate of my money in other people’s hands has never appealed to me, but I understand why people gravitate toward it and why fans love daily fantasy sports.
Daily fantasy sports combine everything we love, and to top it all, they exists right at our fingertips and on our phones. It’s brilliant.
Since the beginning of football season, I couldn’t go 90 seconds without seeing a daily fantasy sports commercial. No, seriously. DraftKings and FanDuel were airing ads every 90 seconds at their peak during football season.
I told myself I wouldn’t succumb to the peer pressure, but I was curious and I wanted to see what the fuss was all about. Can you really blame an “average dude” who’s a sports fan? Isn’t that what the commercials want you to believe?
Daily fantasy sports weren’t supposed to become a billion-dollar industry, but thanks to a tiny exemption with an unclear premise from the Unlawful Internet Gambling Enforcement Act of 2006, the industry was born and this billion-dollar controversy now exists.
Before I ever logged into DraftKings and played a game of daily fantasy sports, I knew something was wrong with the industry, but I couldn’t put my finger on it.
“It just didn’t feel right. If it’s too good to be true, it’s too good to be true,” I told myself, without actually knowing what wasn’t right.
But when I learned on a Tuesday morning that I finished with such a bad team that you could make a sound argument that I had never watched the NFL before, I realized my theory was legit. The current model of daily fantasy sports is unsound and unfair for the “average dude.”
Daily fantasy sports companies, such as DraftKings and FanDuel, want you to believe that you — the homer Patriots fan who believes Tom Brady is the second coming of the Messiah — can just log on to their site, punch in a couple of players names and win big-time money. Sadly, my friends, that just isn’t the case.
Daily fantasy sports rely on “average dudes” to keep their businesses afloat, but the premise that anyone can show up and walk out with a ton of money hides that most players don’t win anything.
There isn’t much research or data yet, partly because the industry is so new, but a McKinsey and Company study found that through the first half of the 2015 MLB season, just 1.3 percent of daily fantasy sports players had won 91 percent of the profits. Yet, DraftKings and FanDuel commercials live by the creed, “Anyone can win.”
Because there is almost no regulation on the industry, daily fantasy sports companies have no oversight. Therefore, they naturally cater to the people who make the money — the professional players, also known as “sharks” — and not the “average dude.”
Just like poker or blackjack, sharks need “average dudes” to play in order to win big-time money. They rely on “bum hunting,” the act of sucking out and taking all of the “average dudes'” money, to make their winnings. The cards are dealt in the sharks’ favor so much that they can play thousands of games simultaneously, use scripting and complex algorithms to change their lineups instantly and still take your money.
The key legal question that courts and states must answer is this: Are daily fantasy sports a game of chance or a game of skill?
It’s a complicated issue that has a simple premise.
But before you answer that question, answer this one: Is poker a game of chance or skill?
Now the premise gets a bit more complicated, and you can make a good case for both.
Because Congress hasn’t taken up the issue, it’s been left to the states to decide this question. Most notably, New York Attorney General Eric Schneiderman reached a deal yesterday with DraftKings and FanDuel to cease operations until at least September so the New York legislator could pass regulation. In Nevada, the state has ruled that daily fantasy sports are gambling and has said that DraftKings and FanDuel must apply for a gambling license.
There’s also the motto that they’re not gambling, but an “entertainment product.” While that has some merit, do you know what’s also an entertainment product? Gambling.
So, back to the important question: Is daily fantasy sports a game of chance or skill?
It’s both. For some players, there is a significant amount of skill used to win. But for most players and the “average dude,” it’s chance. And guess what? Poker is exactly the same way too. The guys that sit on the $1 million tables at the “World Series of Poker” see the game as skill, but for the “average dude” who shows up at the Bellagio for the weekend and brings back $5,000 after going all in on a 7-2 offsuit and gets a full house, it’s chance.
After playing just one game of daily fantasy sports, I could see how this industry is brilliant and horrendous at the same time. I have no issue with how daily fantasy sports enhance the sports experience, but the foundation of the industry is a complete lie with so many cracks that need to be filled.
Just the other week, Virginia became the first state to officially allow daily fantasy sports, and many other states, including Massachusetts, are trying to create regulations to control the industry. However, we need more clarity from Congress, states, attorney generals and major companies, because billions of dollars belonging to “average dudes” are at stake.
Since I played and lost mightily on DraftKings back in October, I have become a bit obsessed with understanding this issue. And for a while, I couldn’t understand why. I don’t like anything that resembles gambling, and I’m not that fond of fantasy sports other than fantasy football. So why?
You can choose to spend your money however you like, but if daily fantasy sports are going to continue to operate and make money off of “average dudes,” let’s be transparent about it. Stop lying to fans, and stop advertising in a deceitful way. People are going to flock to daily fantasy sports because they’re fun and easy to use, but they needs to be regulated so that “average dudes” have some defense against “sharks” who currently have the upper hand in the industry.
Whether you love or hate the concept of daily fantasy sports, the truth is that they’re here to stay. Even with increased public scrutiny, the industry will continue to grow, so let’s be honest about it.
That may be the only thing that isn’t a fantasy in this billion-dollar debate.
Isaac is a sports columnist for The Daily Free Press and a High School Sports Correspondent for The Boston Globe. Born and raised in Columbus, Ohio, Isaac spent the 2015 summer interning at USA TODAY Sports and For The Win. Aside from his love of sports, Isaac has a severe Chipotle addiction and an unhealthy love affair with Ohio State football. Follow him on Twitter @IsaacChipps
They have an answer for the “average dude” – Single entry tournaments. Professionals consistently succeed because they have the capital to enter 500 lineups into one tournament. Taking this element away puts everyone at a much more even playing field. Of course, the “average dude” isn’t smart enough to scroll 10 seconds down the site.
Let’s also be honest about why the government really wants to regulate this industry – they aren’t getting a piece of it. The lottery targets low income gambling addicts, but the state has no problem taking a 40% rake on it.
1.3% have won 90%. Capitalism at its finest. Unless this whole article was one big Bernie advertisement.