DraftKings 'Absolutely Not' Opening Sports Book As FanDuel Also Toes Line On … – Legal Sports Report

For those hoping the daily fantasy sports industry would eventually find ways to distance itself from gambling, it wasn’t a great week.

First, DraftKings received a gaming license to operate in the U.K. Then FanDuel purchased a sports analytics site that has applications in sports betting, as well as daily fantasy sports.

DraftKings = no sports book

The DFS/gambling relationship has gotten to the point where the question of whether DraftKings is going to open a sports book is a legitimate question that needs to be answered by its CEO. From Bloomberg:

Daily fantasy site DraftKings Inc. has a wide range of plans for its overseas expansion. Opening a sports book isn’t one of them.

“Absolutely not,” Chief Executive Officer Jason Robins said in a telephone interview. “We know what we do, and that’s daily fantasy.”

Just as the trend of opening up physical fantasy sports venues began earlier this year, we noted that the industry would want to stay away from the “fantasy sports book” language that some companies were going with. (DraftKings had always avoided that terminology, for the record.)

And while DraftKings’ move to enter the U.K. gaming market could have repercussions in the U.S., it does realize that opening a sports book there would clearly exacerbate the issue. DraftKings very likely never had plans to do anything other than DFS. But, still, the question had to be asked, and that’s telling in and of itself.

Daily fantasy sports remains an unregulated and generally legal skill game in the U.S. — for the time being — and expanding its offerings in other jurisdictions would clearly be problematic in that realm.

FanDuel’s numberFire offers betting advice

FanDuel announced that it had bought the website numberFire on Wednesday, a natural fit between a DFS site and a site that provides lots of relevant data and content for daily fantasy sports.

The flipside of that? The data is also really good for people who want to place sports bets. For instance:

• A numberFire subscription gets you “NBA/MLB/NFL/NHL Game/Spread/Totals Picks.”
• While numberFire is focused on DFS, the site also claims “you’ll get a huge advantage in Vegas too!”
• A page at numberFire also tells prospective users how its picks do straight up, on the moneyline, against the spread and on over/unders.

This information about numberFire is not being presented to imply that FanDuel is getting into the sports betting business. In reality, FanDuel, more than any other site, has taken the most conservative approach of any DFS site in legal issues and linking itself with gambling.

But, this is another example of DFS possibly taking another step backward in its perception in the U.S.

True, there is nothing illegal or even untoward about offering sports betting information, on its own. FanDuel is interested in leveraging the numberFire product for its DFS applications, but CEO Nigel Eccles also said he has his sights set on becoming a “multiplatform sports entertainment company.”

But, if a DFS site buys a product that helps you with both DFS and booking sports bets, it becomes easier for (fill in the blank: legislator, state attorney general, etc.) to draw a line between the two things. One (DFS) is generally considered a skill game, the other (sports betting) is not.

“If data helps you be more successful at skillfully booking sports bets, why is it treated differently from DFS?” the argument would go.

Secondary question: Are the leagues OK with the DFS/gambling linkage?

Three of the four major North American sports leagues (MLB, NBA, NHL) have partnerships with either DraftKings or FanDuel. But as the line becomes blurrier between DFS and gambling or sports betting, it becomes a stickier situation.

The elephant in the room: The NFL

The biggest question remains where the NFL comes down on all this.

Of all the leagues, the NFL is the most conservative on gambling, and on its approach and relationship with DFS. But that hasn’t stopped it from allowing its teams to enter into partnerships with DraftKings and FanDuel, or from establishing daily fantasy lounges or areas in their stadiums.

Much like DraftKings has to answer questions about whether it’s getting into the sports betting business, the NFL’s relationship with DFS is starting to be analyzed and questioned. New England Patriots owner Robert Kraft, for example, is an investor in DraftKings:

.@NFL says Bob Kraft’s stake in DraftKings, which got U.K. gaming license, isn’t an issue under current policies. Worth watching #sportsbiz

— Scott Soshnick (@soshnick) August 20, 2015

The NFL has gone out of its way to have its players not take part in fantasy events tied to gaming establishments, but at the same time a company that now holds a gaming license in the U.K. is sponsoring the “DraftKings Fantasy Sports Zone” in the Patriots’ stadium. (Of course, there is also a casino-sponsored area of the Detroit Lions’ stadium.)

Right now, the NFL is still on board. From a story at GoLocalProv about that new DraftKings venue.

In an email to GoLocal, NFL spokesperson Brian McCarthy briefly stated that the DraftKings lounge at Gillette “isn’t an issue” and that all 32 NFL teams have the opportunity to have such an area in their stadiums.

What’s next on the ‘gambling’ front?

Continuing to say that daily fantasy sports isn’t gambling is becoming a tougher sell — to the media, to the average sports fan, and to the decision makers in the U.S.

We’re also coming up on two key moments for the DFS industry in the U.S.: The result of Nevada’s “legal analysis” of DFS under state gaming statutes, and a report from the American Gaming Association on daily fantasy sports. Both of those could greatly affect the future of DFS.

All of this information taken together could mean U.S. regulation of DFS inevitable.

It’s a safe bet that the three leagues with a stake in the future of DFS will come down on the side of supporting, lobbying for and propping up the industry.

But how will the NFL react as time goes on? That’s a question that will be interesting to watch in the coming months.

Photo by relux used under license CC BY-SA 2.0.

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