DraftKings and FanDuel: More Reasons to Rethink Daily Fantasy Sports
You simply can’t escape the siren call of daily fantasy sports. Turn on the TV, radio, or even browse your favorite website and you’re sure to be blasted with advertisements from one or both of the two big companies that are currently making waves: DraftKings and FanDuel.
Recently, we at The Cheat Sheet dug into the newfound popularity of these sites to see what they’re all about, and whether it’s a good idea to spend your time and money using them. Like a number of other outlets, we found that it’s probably a bad idea to get too deep into fantasy sports — particularly if you’re putting a lot of money on the line. The simple fact of the matter is that you’re not good enough to win, 99 times out of 100.
But it’s easy to sympathize with the people who are drawn to them. They’re fun — but a time sink, and a money pit. You’ll lose in terms of productivity and, in all likelihood, you’ll lose money. Still, as an adult, you can take that calculated risk. The question is, should you?
Though both of these companies have come under intense scrutiny as of late, it doesn’t seem to have put much of a dent in their popularity. In fact, right after a slew of negative and critical press targeted the two companies, they went on to have their best weekend yet, according to CNN, which had access to a report from industry research firm SuperLobby.
“Fears concerning the potential impact of the mainstream media’s negative daily fantasy sports coverage last week appear unjustified,” the report said, per CNN. “If anything, it may be that the ‘there is no such thing as bad publicity’ maxim has come into play.”
Clearly, people are enjoying the DrafKings and FanDuel experience. Or at least are willing to give these sites a shot. But that behavior is at odds with public sentiment, evidently.
New research from CivicScience shows that even as daily fantasy sites continue to grow in popularity, more and more people are suspicious of them, and think regulators should bring down the hammer.
As you can see in the above chart, a CivicScience survey found that at least 49% of respondents agree that DraftKings and FanDuel should be regulated in the same manner as casinos. And there’s good reason for that.
News recently broke that employees of these sites have seemingly been engaging in some unethical behavior. As it turns out, employees of these companies have allegedly been using their insider knowledge to tip the odds in their favor — by playing fantasy sports on the rival’s site. This has, naturally, resulted in class action lawsuits, and some serious scrutiny by regulators.
As CivicScience puts it, “association with gambling, however, is only part of DraftKings’ and FanDuels’ troubles at the moment. Recent allegations of ‘insider trading’ – namely, employees of the companies using privileged information to game the system – raised new questions about the ethics and public perception of the sites.”
And here are how the public is viewing the alleged ‘fixing’ of the game:
So, a third of respondents think the platforms are fixed — and yet, people are still signing up in droves.
Not only that but now the Department of Justice and FBI have gotten involved. A report from The Wall Street Journal says that the federal government is probing the companies, and others like them, to determine whether or not the business models at the core of the industry are in violation of federal law. Basically, it’s a question of whether or not fantasy sports fall under the ‘game of skill’ category, as opposed to ‘game of chance’.
It’s unclear when, or if, any of this will get sorted out, but it should be sending more signals to users or would-be users of sites like these: be very cautious with your money. Again, yes, as of right now, you can play on these platforms, and it’s your money to lose. But there are a lot of things up in the air right now, and if regulators pounce, you may end up losing your cash.
If you still insist on playing, follow the news closely and make sure you’re not getting caught up in antitrust or gambling scandals. Nothing can ruin your day quite like that.
Follow Sam on Twitter @SliceOfGinger