Discuss: “Daily #FantasySports… it’s essentially gambling.” –@jeffma #bookit #SSAC15
— Sloan Sports Conf. (@SloanSportsConf) February 28, 2015
In a seemingly casual remark, former MIT card counter and current tenXer CEO Jeff Ma reignited an ongoing discussion: is daily fantasy sports gambling or not? Ma, to his credit, calls it as he sees it. And considering his impressive biography (he was the subject of the book Bringing Down the House as well as the follow up movie, 21), his opinion carries more weight than most.
The two major daily fantasy sites, DraftKings and FanDuel, would clearly both contend the idea that their users are gambling when they play. A stock line is that “daily fantasy sports is a skill game and is not considered gambling.”
Still, as Ma explained when BostInno caught up with him after he uttered the line during a panel at the MIT Sloan Sports Analytics Conference, “you’re putting money on the line to win more money. What’s that called?”
The reason why this hasn’t become an issue is because the federal government ruled in favor of fantasy sports in its Unlawful Internet Gambling Enforcement Act of 2006. In it, as both Ma and the daily fantasy sites are quick to point out, is a special section defining terms, including what a “bet & wager” is. Under the specifically defined “not included as a bet or wager” section is a reference to fantasy.
This exception is the foundation upon which the growing daily fantasy sports industry has been built. Conversely, as the sports world continues to move closer to legalized gambling, which was the subject of Ma’s panel at the SSAC, daily fantasy competitors will be positioned uniquely well to take advantage.
Until that time however, it’s to be expected that sites like DraftKings and FanDuel will inevitably deny that their product is a form of gambling (since they’re obligated to do so). What’s more, they can legally deny it, given the UIGEA ruling.
Does that mean that Ma is wrong? Well, decide for yourself on that one.
