America at Large: Fantasy football behemoths running into trouble

An American professor was strolling through Cork one afternoon in the early 1990s when her eye was taken by a sign that read “bookmaker”. Figuring this was exactly the type of quaint attraction she hoped to savour during her visit, the excited bibliophile crossed the street and pushed in the door. Imagine her surprise. Instead of skilled artisans stitching together handmade folios with great precision, she came upon a gaggle of biro-wielding men, scribbling furtively on scraps of yellow paper while straining to hear the crackling commentary from some faraway racecourse

That an educated, well-travelled American would not make an immediate connection between bookmaker and betting isn't a shock. In the United States sports gambling has always had a whiff of sulphur about it, a practice largely restricted to casinos, dilapidated racetracks and the clandestine operations of Mob bookies. Even those who knew it existed have always been loath to acknowledge that it did. When ESPN's Scott Van Pelt announced earlier this month that his new SportsCenter show would mention Vegas betting lines when giving out scores, this revolutionary departure actually made headlines.

Perhaps nothing sums up how taboo it has been regarded than the fact professional sports still treat athletes betting on games as a far more egregious crime than them bulking up on steroids so they can rewrite the record books. In every baseball locker room, there hangs an ominous sign declaring: “Any player, umpire, or club or league official or employee, who shall bet any sum whatsoever upon any baseball game with which the bettor has a duty to perform shall be declared permanently ineligible.” Drug-users get 80 games for a first offence. Gamblers get life.

Astonishing

Against that background, it is astonishing to witness the way in which two daily fantasy leagues have so completely transformed the sporting landscape in recent times. In the first week of the new NFL season, DraftKings and FanDuel (whose CEO Nigel Eccles grew up on a dairy farm in Tyrone) spent a combined $27 million (€24 million) on television advertising, a splurge putting them right up there with the bluest chip corporations. It has become impossible to dip into a game without having to endure their garish commercials showing thrilled punters struggling with oversized seven-figure cheques in the demented manner of lottery winners.

As is usual in these ventures, the commercials don’t mention the hundreds of thousands of other hopefuls who paid to play and lost.

DraftKings and FanDuel are both estimated to be worth a billion dollars but the dirty, little secret of the industry is that the majority of those who win money are number-crunchers, using bespoke software and statistical models to enter hundreds of teams at a time, essentially gaming the competition. Hardly any of the $75 million (€67 million) or so in winnings that FanDuel pays out each week goes to amateur dabblers who think they have just entered an oversized version of their office fantasy league.

Both companies are exploiting a loophole in America’s notoriously restrictive gambling legislation that permits games of skill under certain circumstances. They’ve also tapped into the instant gratification zeitgeist, offering a way to play fantasy every day rather than over the drawn-out course of a season. While remaining fervently opposed to gambling, the NFL, NBA and MLB have allowed these operators to flourish because they bring eyeballs to screens, coaxing fans to watch matches involving teams they don’t normally support because of a financial stake in the performance of individuals.

Individual deals

In a sign of how quickly the companies have been accepted as part of the mainstream sporting culture though, the NBA took an equity stake in FanDuel, and Jerry Jones and Bob Kraft, owners of the Dallas Cowboys and New England Patriots, both have a piece of DraftKings. At last count, 28 of the 32 NFL teams have signed individual deals with one or other of the outfits. Indeed, the Jacksonville Jaguars have gone a step farther, renaming a section of their EverBank stadium “FanDuelVille”, styling it as a haven for fantasy players to keep up with the action.

With this rate of growth has come increased scrutiny from those whose turf they have invaded.

“Who’s going to tell me that’s not gambling?” asked Jim Murren, CEO of MGM Resorts International recently. “Of course it’s gambling. But people are doing it, all over the place. It’s not regulated.”

Regulation may be on the horizon as the debate intensifies about where fantasy ends and gambling begins. A generation of fans has come of age for whom these leagues are a crucial, cherished, but, some might say, potentially dangerous, way of engaging with their favourite games. Frank Pallone, a New Jersey Congressman, has called for a government investigation, amid reports of more and more high school and college kids being attracted by leagues dangling an opportunity to turn a $20 into $1 million.

It’s all a long way from the day in 1979 when a writer named Daniel Okrent whiled away a flight to Austin creating the outline for a game based on the box scores of baseball players. He and his friends called it “Rotisserie League” after the French restaurant where they first met to discuss the rules. Imagining that might eventually morph into a multi-billion dollar industry involving 57 million Americans is the stuff of fantasy.