4 Things To Know About Daily Fantasy For 2016

by Guest Post | Jan 6, 2016 | 2016 Season, Daily Fantasy, Fantasy Football

At the beginning of 2015, daily fantasy was a glorious industry packed with avid sports fanatics and it seemingly advertised more than all beverage companies and fast food restaurants in history combined. You couldn’t turn on the TV or visit a sports-related website without seeing a DraftKings ad or a FanDuel banner. The industry was absolutely booming, with millions of users and billions of dollars at play.

Then the elephant in the room finally woke up—if the elephant is state legislatures and the room is a country in which sports gambling is technically illegal. Seemingly all at once (and in part due to a “scandal” in which a DraftKings employee won a major FanDuel contest), state governing bodies began to sniff around the DFS industry and question whether or not it constitutes sports betting. The debate is pretty simple: either DFS is a skill-based game as its top sites’ proprietors argue; or it’s chance-based and therefore no different from betting on a team to win a game, and therefore illegal.

While it’s simple to lay out that debate, it’s far more complex for lawyers and government officials to come to a consensus regarding the answer. The result is that heading into 2016, DFS suddenly seems to be threatened, and there’s a great deal of uncertainty regarding its status and legality. Just to make sure you’re not depositing money on a site that’s about to be banned (or really if you’re just curious), here are four things to know about the specifics of that uncertainty.

1. The Advertising May Stop

According to this report about sports media with regard to DFS, DraftKings and FanDuel were among the top spenders in all of advertising in 2015 (as alluded to previously). But with both companies under fire in various states, there are also reports that they’re looking to delay payments and potentially cancel future media deals. That means that the ads we were bombarded with in 2015 may disappear. However, this is more of a precaution than an indication that the companies are in serious long-term jeopardy.

2. The Sites Are Getting Stricter

In part to project the image that they’re being more carefully regulated and monitored, daily fantasy sites are getting stricter with regard to their user requirements. For instance, if you’re a FanDuel user you may have noticed recently that you can’t play without verifying your information and adding your social security number to your account. Expect this sort of thing to continue as these sites seek to establish themselves as more legitimate.

3. Seven States Have Banned DFS Players

It can get confusing keeping track of the constant reports about which states are involved in legal disputes with the top DFS sites, but this map of legality shows that there are seven states that have already completely banned DFS play, at least until further notice. Four other states have some form of legislation in place regulating the industry, and four more are considering such legislation. The other 35 states have no current restrictions on DFS play.

4. DFS Is Still Growing

Everything up to this point paints a picture of concern regarding the industry, but this report on growth from mid-October indicates “the death of daily fantasy sports is not a concern.” Things have grown a bit more grim since then, but the fact is DFS sites still performed extraordinarily well in the midst of legal battles and growing skepticism about legality and financial security.

That last point is probably the most important. There may well be states that keep DFS illegal, and more are likely to implement some form of legislation or another. But for now, the industry as a whole is safe and sound, despite how it may seem in the news.