The past year was a transformative one for the daily fantasy sports industry. The two biggest DFS companies — DraftKings and FanDuel — determined they would become one. Legal and legislative battles were fought on a variety of fronts. The industry went from one that was totally unregulated to getting governmental oversight for the first time.
On the US sports betting front, it was largely a year of the status quo, although hopes are high for its future legality.
Here is a look back at the biggest stories of 2016.
New Jersey sports betting case loses again
New Jersey has been locked in a battle with the major professional sports leagues and the NCAA for years now as it attempts to legalize sports betting within its borders.
The state had its best chance, seemingly, to win its case this year. After a loss in 2015, the NJ sports betting case received a review from a panel of 12 judges in the Third Circuit Court of Appeals.
Once again, however, the effort to legalize sports betting in the Garden State was turned back in a 9-3 defeat. The case is being appealed to the US Supreme Court; we should find out next month whether that court will hear the appeal.
The DraftKings-FanDuel merger
The DFS industry has been synonymous with its two biggest companies — DraftKings and FanDuel — for several years now. If those companies get their way, they will be one company some time in 2017.
The DFS operators announced a merger in November, although exactly when and how that merger will go down remain a mystery. That a merger would eventually happen has been the scuttlebutt of the industry pretty much since DraftKings rose to prominence.
The move would make sense on a lot of fronts. They will no longer have to compete against one another for users and with marketing dollars, and they will be able to streamline their efforts nearly everywhere.
That the merger was announced was a big deal. But the reality that accompanies the actual merger will likely be the biggest story in DFS next year.
New York goes legal for DFS
The battle for New York cannot be understated in its importance for the DFS industry. If the legality of DFS had remained up in the air, it may have generated wide-ranging ramifications for the over-arching industry.
Gov. Andrew Cuomo signed a DFS legalization and regulatory bill into law in August, largely bringing an end to a legal tug-of-war that had gone on for much of the previous year:
- In November of 2015, NY Attorney General Eric Schneiderman issued cease-and-desist letters to DraftKings and FanDuel.
- In March, the sites pulled out of the state entirely as part of a settlement with Schneiderman while a legislative solution was worked out.
- Wrangling in the statehouse came down to the wire in June, but eventually it passed a bill.
Without New York, the very underpinnings of the industry might have been in question. With the legal clarity offered by the state government, the future looked much brighter for all involved.
The DFS state battles
While New York was the biggest state to consider DFS and its legality, battles went on across the country.
A variety of state AGs weighed in on DFS this year, many of them saying the contests are illegal under state law.
But the victories were also plentiful at the state level, with a variety of states (New York included) legalizing and regulating DFS. The rest:
- Virginia
- Indiana
- Mississippi
- Missouri
- Tennessee
- Colorado
- Massachusetts
DFS, sports betting get their day in Congress
In the wake of the furor over DFS at the tail end of 2015, the federal government decided to dip its toe in the water on DFS and sports betting.
That came in the form of a hearing in a House committee in May. And while little of substance happened or was discussed, it was still noteworthy that Congress talked about the issues at all. If nothing else, it could set the stage for more conversations — more likely on sports betting than DFS — in the future.
