DFS “indistinguishable from betting”, US Congress hears

Committee hearing on daily fantasy sports fails to break new ground

 Daily fantasy operators (DFS) were called out in Congress this week for their alleged “hypocrisy” in claiming to offer games of skill while also applying for UK gambling licenses.

At a hearing held by the Subcommittee on Commerce, Manufacturing and Trade Hearing, Congressman Frank Pallone criticized DFS operators for their stance on games of skills versus chance, before also calling out the leagues who backed DFS but not betting.

“I must also mention the hypocrisy of those arguing that daily fantasy sports is readily distinguishable from traditional sports betting,” said Pallone in his opening statement.

“While quietly applying for and receiving gambling licenses in the UK, DFS operators continue to argue to interested states in the US that—unlike sports betting—DFS is not gambling. Their reliance on the arbitrary distinction of skill and chance is also unconvincing, especially since both the Department of Justice and the NFL have asserted that sports betting also is a game of skill.

“And speaking of the professional sports leagues, they have reaped huge profits from their partnerships with daily fantasy sports operators. At the same time, most remain stubbornly opposed to sports betting on the grounds that their players could become involved in gambling and organized crime if it were legalized.”

Although the hearing was ostensibly held to investigate the state of the DFS industry and whether it needed federal regulation instead of the current piecemeal approach, sports betting was repeatedly shoehorned into the debate.

American Gaming Association CEO Geoff Freeman said in his testimony that any debate on DFS should include the gaming industry.

“The debate about DFS touches on the broader issue of sports betting in America. DFS gives sports fans the ability to engage more deeply with their favorite sports and athletes. But the desire to engage with the sports Americans enjoy is also fuelling illegal sports betting.

“The gaming industry invites those who are serious about protecting the integrity of sports to partner with us in pursuit of eliminating the sports betting black market.”

Mark Locke, CEO of data provider Genius Sports, testified at the hearing that regulated betting markets could help protect the integrity of sporting events.

“Everyone wants each sporting event to take place in an atmosphere of the utmost confidence and integrity, and we are committed to continuing to work with the sports industry to deploy the most advanced technology and education services which will make a positive contribution to the world of sport.”

However, industry insiders were pessimistic that the hearing – which the pro leagues and big two DFS operators declined to attend – would have any major impact.

Gaming lawyer Daniel Wallach tweeted: “For a hearing that started out so promising, it quickly pivoted into “waste of time” territory, while FastFantasy CEO Joe Brennan Jr tweeted: “See you all in the Fall, when we’re sure to have another one of these #DFShearing”.