Editorials

Editorial: Fantasy sports need oversight

In this Sept. 9, 2015, photo, Len Don Diego, marketing manager for content at DraftKings, a daily fantasy sports company, works at his station at the company’s offices in Boston. New York’s attorney general sent letters to DraftKings and FanDuel on Oct. 6 demanding that they turn over details of any investigations into their employees.
In this Sept. 9, 2015, photo, Len Don Diego, marketing manager for content at DraftKings, a daily fantasy sports company, works at his station at the company’s offices in Boston. New York’s attorney general sent letters to DraftKings and FanDuel on Oct. 6 demanding that they turn over details of any investigations into their employees. The Associated Press/File Photo

On any given Sunday, millions of Americans go online, assemble a team, place a wager and wait for the outcome of the day’s NFL games. Many will lose their money. Some will win – and win big. Maybe even millions of dollars.

This will happen even though the companies that run these gaming websites are subject to zero government oversight and have admitted to insider trading. They also have alliances with more than a dozen NFL teams, as well as other professional sports leagues.

But it’s not gambling, say the NFL and others. Talk about living in a fantasy world.

It’s time for a reality check on the rapidly growing industry known as daily fantasy sports gaming. In short order, it has become a multibillion-dollar industry, with investors including hedge funds and media conglomerates.

The concept itself has been around for years. Its roots lie in plain old fantasy gaming, in which friends or colleagues in an office pool compete against one another, picking athletes from various teams and tracking them over an entire season to determine a winner.

Then technology enabled the betting to be taken up several notches. Pushed early on by the NBA and MLB, websites invited people to try to beat out strangers on a daily or weekly basis.

Those not inclined to risk their money might know of industry leaders FanDuel and DraftKings from their endless TV commercials. During the Thursday, Oct. 8 match-up between the Indianapolis Colts and the Houston Texans, for example, five DraftKings ads aired in the second half alone.

The jackpots are eye-popping. FanDuel vows it will pay out $2 billion to winners this year and DraftKings another $1 billion.

Still, the industry swears fantasy gaming isn’t gambling because it’s based on skill, namely a person’s knowledge of sports. We say that’s semantics. An untold, but surely massive amount of money is changing hands each day as people place what are essentially bets on how well athletes will perform in a game. It’s no different from betting on horse races. And it must be regulated.

In California, Assembly Member Adam Gray, D-Merced has introduced AB 1437. It would require fantasy gaming companies to register with the state and follow certain rules, such as impossible-to-enforce age restrictions for players. While we applaud Gray’s gumption in taking on this issue, stronger regulations are needed to ensure transparency and eliminate any hint of insider trading.

We’d also prefer national legislation. That could come from U.S. Rep. Frank Pallone Jr., D-N.J., who recently requested a hearing to explore the relationship between fantasy sports and gambling.

Any proposal must close the loophole in a 2006 federal law, which fantasy companies are exploiting. That law banned online poker, but allowed then-small-ball fantasy gaming to flourish into what it is today.

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