Tuesday, November 21, 2017
Business

Congress putting daily fantasy sports games under scrutiny

RECOMMENDED READING


WASHINGTON — Congress on Wednesday launched a fact-finding mission into the loosely regulated world of fantasy sports games — a multibillion-dollar business that seemingly advertised everywhere during the pro football season.

Lawmakers at a House hearing were generally supportive of the industry as they explored whether federal safeguards are needed to protect players in daily fantasy leagues. Most players ending up losing at the hands of better-informed players who often have a technological edge.

States are beginning to enact a patchwork of laws regulating the industry and its dominant companies, DraftKings and FanDuel.

Fantasy sports games involve choosing an imaginary roster of players from different teams, accumulating a score based on the players' performances and matching up against one or more opponents. Fantasy games long have been a rec room favorite of friends played out over entire seasons, with the best teams determining shares of a jackpot.

But daily fantasy sports works at a much faster pace, permitting gambling every day or weekend, either in head-to-head matchups against other players or at tournaments offering the promise of bigger payouts. The companies generally make their profits by "raking" a percentage of entry fees.

The explosive growth of commercial fantasy sports games has meant greater scrutiny — of multimillion-dollar ad campaigns, of allegations of insider trading of information, and of the widespread losses by casual players at the hands of "sharks" armed with sophisticated computer analyses.

"It is crucial that consumers know what they are purchasing when they sign up for (daily fantasy games) and that they understand the risk of losing money in the process," said Rep. Frank Pallone, D-N.J., who requested the hearing by a House Energy and Commerce subcommittee. "For example, there are reports that 90 percent of payouts were won by just 1 percent of winners."

The companies maintain that daily fantasy sports games are not gambling but games of skill.

The hearing did not represent a rush to impose federal regulations on the booming industry. Gambling is generally regulated by the states, which have stepped up their activity. Four explicitly legalized the games this year, with varying degrees of consumer protection.

But New York has cracked down on DraftKings and FanDuel as illegal gambling operations and about a dozen states are challenging the legality of commercial fantasy sports.

"We must keep in mind that a patchwork of differing and contradictory state laws has the potential to negatively impact consumers, and harm further growth and innovation in the process," said the committee chairman, Rep. Fred Upton, R-Mich.

States permitting the games have adopted different degrees of consumer protections. They include prohibiting minors from playing, restricting the use of computer programs that can generate large numbers of entries, acting to protect players with compulsive gambling problems, and segregating players' money from company operating funds.

Fantasy sports have been a boon for major sports leagues such as the National Football League, in great part because fans watch more games and often continue to watch lopsided games that involve their fantasy players. While the NFL does not have a stake in either DraftKings or FanDuel, the vast majority of NFL teams have sponsorship or marketing deals with the companies.

The National Basketball Association, Major League Baseball, and the National Hockey League each have ownership stakes in either DraftKings or FanDuel, and prominent NFL owners Jerry Jones of the Dallas Cowboys and Robert Kraft of the New England Patriots have equity in DraftKings.

Representatives from DraftKings, FanDuel and the major professional sports leagues did not accept invitations to testify before the subcommittee.

Comments
More guns being detected at Tampa Bay area airports — and everywhere else

More guns being detected at Tampa Bay area airports — and everywhere else

TAMPA — Here’s some travel math for this traditionally heavy day for long trips: More people carrying guns plus more people flying equals more guns going to the airport.The numbers bear this out. The federal Transportation Security Administration has...
Updated: 1 hour ago
A year after impasse, Pasco school contract talks run more smoothly

A year after impasse, Pasco school contract talks run more smoothly

LAND O’LAKES — Representatives from the Pasco County school district and the United School Employees of Pasco sat together several times in the weeks leading to Thanksgiving break, trading contract proposals amid (mostly) amicable conversation.They c...
Updated: 2 hours ago

Florida Supreme Court suspends two Hillsborough lawyers

Times Staff WriterTwo Hillsborough County lawyers have been suspended from practice because of professional misconduct.The Florida Supreme Court ordered a 91-day suspension for Richard Luther Bradford of Brandon after he was found in contempt for fai...
Updated: 3 hours ago
Workers at luxury St. Pete condo tower say they are owed thousands

Workers at luxury St. Pete condo tower say they are owed thousands

ST. PETERSBURG — Nearly three dozen workers at ONE St. Petersburg, a luxury condo tower under construction in the heart of downtown, haven’t been paid in weeks and are owed thousands of dollars.With the holidays nearing, some of the men say they are ...
Updated: 4 hours ago
Get all the Black Friday sales circulars today. Here’s how

Get all the Black Friday sales circulars today. Here’s how

The Tampa Bay Times Thanksgiving Early Bird edition, with all of the Black Friday ads and sales circulars, is available today.That’s right. You don’t have to wait until Thursday to check out the savings. Weighing nearly five pounds, the Early Bird Ed...
Updated: 6 hours ago
Some cities faced with all-or-nothing medical marijuana rules are playing it safe

Some cities faced with all-or-nothing medical marijuana rules are playing it safe

When it comes to weighing the options for regulating medical marijuana through the law passed this year, Dunedin city commissioners declared local governments face a "conundrum" and "a false dilemma."They said they would welcome a dispensary in the c...
Published: 11/22/17
U.S. business leaders say Cuba is still open, at least to them, despite Trump’s new rules

U.S. business leaders say Cuba is still open, at least to them, despite Trump’s new rules

WASHINGTON — When the Trump administration announced new Cuba regulations, it sparked a new round of hand-wringing in Washington over a return to a posture not seen since the Cold War. But now, the American business community is quietly spreading the...
Published: 11/22/17
Online purchases, gift cards expected to rule holiday shopping

Online purchases, gift cards expected to rule holiday shopping

The name of the game for this holiday shopping season is online purchases and gift cards. According to a holiday shopping forecast by AAA, The Auto Club Group, Floridians are expected to spend $951 on gifts — up 9 percent from last year — and much of...
Updated: 3 hours ago
Barricades reinforce security for holiday events on St. Petersburg’s downtown waterfront

Barricades reinforce security for holiday events on St. Petersburg’s downtown waterfront

ST. PETERSBURG — World and national tragedies are changing the city’s approach to security for special events at North Straub Park.With the approach of the holidays, concrete barricades have been erected at a section of the park’s perimeter, where Fo...
Updated: 4 hours ago
A new threat this shopping season: toys that can spy on kids

A new threat this shopping season: toys that can spy on kids

ST. PETERSBURG — Not all sinister toys are as obvious as a Chucky doll. Many present more subtle threats — choking hazards, high lead content, privacy concerns. And as the biggest shopping season of the year kicks off, consumer advocates are urging s...
Published: 11/21/17