[toc]A strange thing happened at a daily fantasy sports hearing in Oregon that promised to be much like ones that have been held in state legislatures around the US in the past two years.
A new foe stepped up to the plate.
IGT vs. daily fantasy sports
International Game Technology — better known as IGT — is a gaming company and the world’s largest slot machine manufacturer. A lobbyist representing IGT testified in front of the Oregon House Committee On Business and Labor about a pair of fantasy sports bills recently.
One of those bills would clarify the legality of DFS and regulate it as a game of skill. The other would designate it as a game of chance under state gambling laws. It’s one of very few states where opposing bills of these types exist; usually bills just seek to legalize it.
IGT’s position during that hearing? DFS is fine, as long as it is treated as gambling under state law. (It supported the “game of chance” bill.) That, of course, is a non-starter for the DFS industry, led by DraftKings and FanDuel. They won’t agree to any bill that designates their contests as anything other than a game of skill.
IGT is believed to have been lobbying to some extent behind the scenes against DFS legalization before this. But Oregon is apparently the first time IGT publicly testified against DFS legislation.
What’s IGT’s skin in the DFS game?
It’s not entirely clear what IGT’s endgame is, other than it apparently sees DFS — at least as the industry is currently situated — as some sort of threat to its business. (In Oregon, IGT has a deal with the state to provide video lottery terminals.)
Marc La Vorgna, a spokesperson for DraftKings and FanDuel, has a theory, however.
“It’s all a phony effort to use their government contracts — where they take tens of millions from taxpayers — to block competition and create some kind of cheap, scratch-off version of fantasy sports for them to profit off,” La Vorgna told Legal Sports Report.
“But we were glad to see in Oregon, IGT was finally willing to put their name on being anti-fantasy sports.”
Stop Daily Fantasy Gambling?
Interestingly, a new group called Stop Daily Fantasy Gambling cropped up at about the same time as IGT’s DFS opposition ramped up. The group is organized as a non-profit, so its backers are unknown. LSR cannot verify that SDFG and IGT are necessarily linked.
Here is the SDFG mission statement: “The goal of Stop Daily Fantasy Gambling is to stop the proliferation of illegal gambling including all forms of illegal daily fantasy sports gambling.”
A spokesperson for SDFG provided this statement about its backers: “Stop Daily Fantasy Gambling is a 501c(4) that does not disclose donor information.”
La Vorgna said he believes IGT is behind the group.
“They have been operating in the shadows, building a sham, astroturf anti-fantasy sports group based out of Texas,” La Vorgna said. “Three people on the board, one is a San Francisco attorney who has represented IGT interests for 20 years — not a coincidence.”
IGT has not yet responded to a press inquiry from LSR.
Texas and IGT/SDFG
La Vorgna questioned why the group did not testify at a Texas daily fantasy sports hearing held on Monday. (IGT also did not testify publicly there.)
“Last week, this Texas-based anti-fantasy group, which has been aggressively publicly advocating to kill the bill and doing anything they can to draw media attention, did not testify at the hearing on the Texas law. Why not?” La Vorgna said.
“This should have been their moment. They didn’t testify because they knew they would have been exposed as fraud if asked in a public setting who their members are — they don’t have any — and who is backing or created the group — a gaming company. So they hid.”
What Stop Daily Fantasy Gambling says about its efforts
The SDFG spokesperson offered this statement about its lobbying in Oregon and Texas:
Stop Daily Fantasy Gambling is a national organization focused on the effort to prevent the spread of unregulated gambling across the US and to ensure that states that allow gambling are implementing meaningful regulation and not creating loopholes. Each state is unique, and in some states it makes sense to provide lawmakers the perspective of the organization directly like we did recently in Oregon.
In other states the focus is on raising the awareness of the public and media to the efforts of DFS gambling operators to circumvent current law. In Texas, the Attorney General has already determined that DFS is gambling and should be treated as such. Therefore we are focusing on making sure the public and media understand the facts (for example, the recent Fort Worth Star Telegram article by Anna Tinsley) in Texas and not trying to influence the majority of lawmakers who already understand that DFS is, in fact, gambling.
In other words, each state which considers regulating DFS will have a response from Stop Daily Fantasy Gambling tailored to the circumstances of that state.
Other DFS enemies, and what’s next
DFS has had no shortage of foes in its short history. Here’s a non-exhaustive list:
- Indian tribes are believed to have stopped or slowed legislation in a variety of gaming states.
- Land-based casinos have push back against the idea that DFS should not be treated as gambling. Casinos have not always lobbied actively against bills, however.
- A variety of morality-based lobbying groups have decried DFS as an expansion of gambling.
If IGT’s Oregon appearance presages a more coordinated effort against DFS, it means a tougher road for DraftKings and FanDuel in some states.
Right now, the biggest state is Texas, where a negative attorney general opinion exists on DFS. (DraftKings takes customers there, and FanDuel does not.) Texas is a problematic state for DFS legalization, even without IGT’s lobbying. A bill made it out of a House committee this week and is in front of the full House.
DFS legislation doesn’t always run up against organized lobbying the likes of which IGT can deploy. But it’s clear there is momentum around the country for DFS legalization, with nine states passing laws since the start of 2016, and more on tap this year.