Why Is The Daily Fantasy Sports Industry Impacting Major League Baseball’s Sports Betting Stance?

Posted on June 8, 2016

[toc]The legal and regulatory morass surrounding daily fantasy sports is slowing any progress Major League Baseball might make on sports betting, according to Commissioner Rob Manfred.

What Manfred said on sports betting this time around

In speaking in an extensive interview in the Washington Post, Manfred touched on the issues of DFS and sports betting:

Baseball hasn’t changed its anti-gambling stance, and Rob Manfred, the MLB commissioner, said this week the ongoing debate over daily fantasy sports has “slowed those discussions.”

“There’s not a lot of buzz among the group internally,” he said. “I think we’re waiting to see how the daily fantasy issue works out from a regulatory perspective before we make any move.”

The latter comment was initially made out of the MLB owners meetings in May.

MLB, of course, has a partnership in place with DraftKings and equity in the DFS site. But it’s not at all clear why DFS is impacting anything to do with the league’s stance on gambling or sports betting.

What else Manfred has said on DFS previously

MLB is clearly worried about the legal and regulatory issues facing the DFS industry. From April, Manfred said he was surprised when state attorneys general started opining in a negative way about DFS:

“Our research was focused on the federal law which differentiated gambling based on whether or not something was a game of skill or a game of chance. … We did not expect individual states to intercede on this issue.”

Before the growing legal concerns for the industry, Manfred had been less tepid in his support of the industry and dismissive of DFS having anything to do with sports betting:

“We did thoroughly investigate the games that were available on the site [DraftKings], and we were completely comfortable with the idea that those games were consistent with the existing federal law.

“Put the law to one side. There’s a huge difference between Rob Manfred, citizen, betting on whether Kansas City beats Toronto or whomever on the one hand, and Rob Manfred picking nine guys off 18 teams to try to see if he can accumulate more points within a given set of guidelines than 100 other guys trying to do the same thing. Forget the law for a minute. I see those as two completely different dynamics.”

Does Manfred’s stance make any sense?

So given those statements, why, exactly, does DFS have anything to do with what the MLB does regarding sports betting? After all, MLB and most of its teams still have deals in place with DraftKings, and Manfred and the league don’t believe DFS constitutes gambling.

It’s at least feasible MLB is being cautious while the legislature in New York works on a DFS bill. Otherwise, there’s a chance that the courts come to the conclusion that DFS is illegal gambling under state law. (MLB, like the other pro leagues, is headquartered in New York.)

Beyond that, however, there is little reason why DFS should negatively impact what the MLB thinks about sports betting. If anything, you can make the argument that it should be the other way around.

The growth of the DFS industry before the events of the past year demonstrates that there is a massive appetite for people having a monetary interest in the outcome of sporting events and player performances. And with the ever-growing expansion of gambling around the country — and a growing number of states legalizing or trying to legalize DFSmorality-based arguments against DFS and sports betting continue to hold less water.

DFS and sports betting also come from different starting points, in which the regulation and legality of the former has little to do with the latter:

The MLB can still be worried about sports betting’s impact on game integrity while embracing DFS — those stances are not in opposition. However, it’s one thing for MLB to simply be tepid on its “anti-gambling” stance, and another to blame the problems being experienced by DFS for not moving off of that stance.

MLB vs. the other leagues

Where are the other major US leagues on DFS and sports betting?

Albert H. Teich / Shutterstock.com

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Dustin Gouker

Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.

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