Pot Meet Kettle
DFS 2.0 operators are not holding back in their claims of anti-competitiveness and hypocrisy against DraftKings and FanDuel.
The Bulletin Board
NEWS: Adam Wexler, the CEO of PrizePicks, discusses the current DFS drama and contends FanDuel and DraftKings nearly destroyed the DFS industry.
BEYOND the HEADLINE: DFS 2.0 companies point the finger at DraftKings and FanDuel, claiming they are putting their thumb on the regulatory scale.
WAY BEYOND the HEADLINE: My evolving thoughts on gambling products.
NEWS: Two somewhat mysterious sports betting initiatives filed in California, but both are DOA.
NEWS: East Coast Gaming Congress to honor longtime New Jersey Division of Gaming Enforcement chief David Rebuck with Lifetime Achievement Award.
AROUND the WATERCOOLER: Arcades are casinos for kids.
STRAY THOUGHTS: Three months of newsletters.
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PrizePicks CEO Gets to the Heart of the DFS Debate
In an interview with YogoNet, PrizePicks CEO Adam Wexler touched on the current discourse around Pick’ Em style DFS products.
“Product innovation has surpassed what are now antiquated views on what fantasy is and isn’t – views primarily pushed by large sportsbook casinos,” Wexler said.
He also called for clarity in the space, saying, “Our team and fellow market companions are committed to working with policymakers and regulators on ensuring DFS is not limited to the outdated products offered by the industry’s two largest behemoths.”
As Wexler put it, DFS has a long history of having to argue for legalization. “I don’t believe that fantasy sports enthusiasts recognize it enough, but the aggressive tactics of DraftKings and FanDuel brought the entire industry to the brink of existence,” said Wexler. (I believe Wexler is referencing the situation that began in 2015 when DraftKings and FanDuel were painted as the “unregulated” operators).
Less than a decade later, it’s DraftKings and FanDuel that are crying foul at PrizePicks, Underdog (a newsletter sponsor), and the other DFS 2.0 operators as pushing that envelope too far.
Getting down to brass tacks, daily fantasy sports was born out of a legal loophole, and the industry has always pushed the envelope.
Beyond the Headline: Thumb on the Scale
Sam McQuillan reports, “Emails show a lobbyist, tied to a group that includes DraftKings and FanDuel, made Wyoming regulators aware of PrizePicks and Underdog, before they sent cease and deists to both fantasy companies.”
Underdog CEO Jeremy Levine tweeted in response, “FanDuel and DraftKings don’t want to compete on product. Instead, they’re working the political backrooms to try to limit competition and options for customers. And then they stand up on a stage at G2E and try to mislead our entire industry.”
The Underdog account tweeted a two-minute clip of FanDuel CEO Amy Howe and DraftKings CEO Jason Robins from their G2E panel, where Robins sidestepped Contessa Brewer’s question about their lobbying efforts.
Underdog General Counsel Nicholas Green tweeted his thoughts on McQuillan’s reporting: “Does this matter? Absolutely. The record response doesn’t show any internal investigation, analysis, outreach to operators - nothing. Just straight from the lobbyist into an official letter and back to the lobbyist and then into the press. Our letter’s still in the mail.”
Dustin Gouker posted a 10-minute podcast explaining his views (which partially conflict with the DFS 2.0 companies) on the situation. Gouker notes that DraftKings and FanDuel aren’t doing anything untoward (perhaps hypocritical) by pointing out these games to regulators. So yes, their thumb is on the scale, but it is allowed to be there.
I also recommend the recently released Episode 129 of the iGaming Daily Podcast - A Short History of Fantasy Sports with FSTA board member Rick Wolf along with Sue Schneider and host Jessica Welman. The episode dives into the history of fantasy sports, including the never-ending question of whether or not it’s gambling.
WAY Beyond the Headline: From a Certain Point of View
Transport me back to 2016, and I would cast a very skeptical eye at any DFS products, sweepstakes sites, skill games, freemium apps, loot boxes, lottery couriers, membership-fee cardrooms, player-banked blackjack, and a dozen other “legal because” products.
I would also laugh at the preposterous arguments some states have used to expand gambling (mostly, but not entirely, related to sports betting) outside of normal channels.
Over the years, my views have changed. I’m no longer the ideologue on this issue that I used to be. My new attitude is along the lines of, “Fair play to you.”
First, it’s an exercise in futility. There is always a loophole to exploit (see my list above), and when there isn’t, you get black market operators filling the void.
Second, I have no idea where to draw the line, and neither do lawmakers and regulators who know way less about these topics than I do.
As I’ve argued before, baseball cards fit the definition of gambling. So does the Claw Machine (see the Around the Watercooler header below). Any stance other than the two extremes is hypocritical and a case of picking winners and losers by creating arbitrary lines.
Bottom line: What is and isn’t gambling is a game I have little interest in playing. There are two things I want to know about a “gambling” product:
Is the company licensed or operating with regulatory approval?
Is the company legitimate and acting responsibly in the space?
If it meets those two bars, it’s hard for me to get worked up about it. I always circle back to former Massachusetts Gaming Commission Chair Stephen Crosby’s simple solution, “Call it all gambling and let the regulators work it out.”
The reason for the current DFS debate is the creation of a category within a category within a category: Fantasy sports inside sports betting inside gambling.
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New California Sports Betting Initiatives are DOA
As reported by Play USA and hinted at several weeks ago, two sports betting initiatives have been filed in California.
Whenever there is a development in California, the first person I want to hear from is Victor Rocha, who runs Pechanga.net and is a member of the Pechanga Band of Indians.
Rocha did not disappoint, tweeting that the initiatives were “so dead” and called the instigators “morons” after relaying a letter from the California Nations Indian Gaming Association on the initiatives, which reads:
The California Nations Indian Gaming Association is deeply disappointed that the sponsors of the two recently filed initiatives did not first reach out to the State’s largest tribal gaming association for consultation and input. Instead, CNIGA and our member tribes were alerted to their existence when they were filed with the Attorney General today.
Decisions driving the future of tribal governments should be made by tribal governments. While the sponsors of these initiatives may believe they know what is best for tribes, we encourage them to engage with Indian Country and ask, rather than dictate.
And with that, I won’t bother you with the details of the initiatives.
Of interest is who is behind the measures. In trying to find out who was behind the initiative, Rocha has run into a cloud of fog:
Honoring The Most Consequential Person In Legal US Online Gambling
David Rebuck has helmed the New Jersey Division of Gaming Enforcement since 2011. It’s hard to explain how much of an outlier that is among gambling regulators.
For some perspective, the Pennsylvania Gaming Control Board has had six chairs in its 20-year history and four since 2011. The Nevada Gaming Control Board has had six chairs since 2011.
Rebuck will be honored with a lifetime achievement award at the upcoming East Coast Gaming Congress (ECGC) in April 2024.
“Dave Rebuck’s tenure at the Division of Gaming Enforcement, beginning in 2011, coincided with an explosion of new technologies that presented enormous opportunities for the gaming industry as well as great challenges for regulators. He addressed each and every challenge, from igaming to sports betting and beyond, while maintaining New Jersey’s unyielding focus on gaming integrity,” said ECGC co-founder Michael Pollock in a press release.
In an article celebrating New Jersey’s 10th Anniversary of online gambling, I called Rebuck “The most important person in New Jersey’s iGaming history.”
“A big part of New Jersey’s online gambling success is consistency at the top, with David Rebuck leading the DGE throughout the entire online era. The Rebuck-led DGE has communicated with and learned from other jurisdictions and shown a willingness, and the means, to adapt to an ever-changing industry.
“Under Rebuck, New Jersey successfully launched (in record time) online gambling and sports betting while juggling the closure and openings of multiple casino properties. Rebuck has also dealt with everything from cyberattacks to dealing with black market operators to overseeing the gaming-heavy state during a pandemic.
“And throughout it all, the DGE has been one of the industry's most transparent and communicative regulatory bodies.”
Around the Watercooler
Social media conversations, rumors, and gossip.
Yes, that is hyperbole. As I’ve said in the past (and above), carnival games and arcade games like the Claw Machine are great ways to educate kids about the mechanics and potential dangers of gambling because they are gambling.
Stray Thoughts
The newsletter is approaching its three-month anniversary, and I’m genuinely touched by all the support I’ve received.
I’m starting to settle into a groove on the content, which has allowed me to branch out and start creating more exclusive content like Friday’s feature on GeoComply state launch data. I plan on adding more exclusive content, including the previously announced podcast, which is getting closer to reality.
Once again, thank you for all your support.