Fantasy football remained on the periphery of my consciousness until this season.
These primarily online games allow sports fans to “draft” players to be on their virtual team.
Points are earned based on football players’ performances in real-life games, with the winning fantasy player having the highest point total at the end of the league.
Television and radio ads during sports programming have been inundated recently with fantasy football promotions from Fan Duel and DraftKings – two of the largest fantasy sites.
DraftKings had 4.4 million entries last week while Fan Duel had 3.38 million (record highs for both sites), resulting in record profits – $2.6 million for DraftKings and $2.5 million for Fan Duel.
Recent media attention has focused on both sites changing policies that previously allowed employees to play in the leagues.
While a positive change, it doesn’t address a more substantive issue in this largely unregulated industry: their ads.
“Playing a game in one day and getting paid the same day is awesome,” says one Fan Duel player who has won $762,388. Another player featured in the company’s ads says, “I deposited $35 dollars … and won over $2 million.”
When fantasy sports first emerged, it seemed to be primarily a way for fans to compete with one another for the pride of winning their fantasy league.
It has become a multimillion dollar industry that exploits the same instinct as a trip to Vegas or playing the lottery – the desire for quick, easy wealth.
I’m not naÃ¯ve. Betting was a part of fantasy sports from the beginning, but a DraftKings ad alludes to the shift from fantasy leagues as a fun hobby to a money-driven industry.
“We play for glory, for bragging rights, for fantasy football supremacy … but we also play for this: the giant check … it is our trophy and many hoist it,” one ad begins.
When comparing these promotions to state lottery ads, the similarities are striking.
Large cash prizes are emphasized, the ease of participating and the low cost of entry are touted, and ordinary folks who have won are prominently featured.
This is troubling, given that lotteries are notoriously exploitative of the economically disadvantaged who are enticed by the possibility, however remote, of escaping poverty through a multimillion dollar prize.
While the demographics on who is playing fantasy sports is less clear, what is clear is that, like the lottery, a small number of folks make a significant amount of money off the investments of the rest of the players.
What makes fantasy sports more insidious is the fact that, like Vegas gambling, the average player thinks he or she has a better chance of winning by having some control over their destiny.
DraftKings promotes this idea in its “Why is it Legal?” FAQ in seeking to separate themselves from the “gambling” label.
They note: “Federal law and 45 of the 50 U.S. states allow skill-based gaming. Daily fantasy sports is a skill game and is not considered gambling.”
Currently, this qualification allows fantasy sports to be exempted from regulations prohibiting online wagering.
The distinction seems dubious, as similar claims could be made for any game in which users have some measure of control over their fate (poker, for example).
Several Las Vegas leaders agree.
“You put up something of value, cash, to win something of value, cash,” Joe Asher, CEO of sports book operator William Hill U.S., told the Las Vegas Review Journal. “It’s the classic definition of gambling.”
MGM Resorts international chairman Jim Murren agreed, stating, “Clearly this cannot be ignored, and it is gambling. We have not engaged in it as a commercial enterprise because we haven’t gotten comfort by our regulators that we should.”
“I don’t know how to run a football team, but I do know how to run a casino, and this is gambling,” he added.
Despite the claim of being “skill-based gaming,” for the average person whom these ads entice to wager money on their fantasy team, the odds of winning hundreds (much less thousands or millions) of dollars might be slightly better than winning the lottery but little better than the odds of doing so in Vegas.
In fact, breaking even will prove to be challenging for most.
Drew Dinkmeyer, a former investment analyst, told ESPN he had quit his job in 2013 to play fantasy sports daily.
He developed strategies to win a high percentage of his leagues, became a sponsored pro at DraftKings and recently won $1 million.
For those tempted to follow in his footsteps, Dinkmeyer says there are now at least 200 elite players who win their fantasy leagues/matches 70 percent of the time.
While Dinkmeyer’s estimates might seem insignificant given the thousands of people who play fantasy sports each week, consider that these “sharks” play multiple games, as a Washington Post column explains.
“In daily fantasy sports, any player of any skill level can play any game – and, often, the best bettors play in bulk, betting on hundreds of matches at the same time. If you’re a newbie, there’s a very high chance you’ll play against the best on the site, and that they may wipe you out.”
A survey of Major League Baseball fantasy leagues, cited by the Washington Post, found that “the top 1 percent of players … paid 40 percent of the entry fees but reaped 91 percent of the profits. Meanwhile … the bottom 80 percent paid an average of $49 in entry fees and lost half that cash.”
If lotteries entice lower-income folks to spend their meager disposable income on games of chance with low probabilities of success, a similar trend could conceivably emerge in the booming fantasy sports industry – if it isn’t already taking place.
Since the deck is stacked and the odds are never in the average player’s favor, we might be witnessing a new means by which folks in poverty are enticed and exploited through yet another enticement to throw away their meager wages in the hope of “the giant check.”
The newly launched FBI investigation of fantasy sports sites, coupled with the Nevada Gaming Control Board designating fantasy sports as gambling, are helpful beginnings to providing oversight and regulation of this expanding industry.