No one has fully realized the potential that daily fantasy sports laws have opened up.
Is that starting to change?
DFS vs. sports betting
So far, 12 states have passed laws that in some way legalize and/or regulate paid-entry fantasy sports. And more or are likely on the way.
At the same time, there are several avenues for online sports betting to become legal in the US. Those include:
- The possibility of the US Supreme Court finding that states can repeal their own sports betting laws, via the New Jersey sports betting case.
- Another state challenging the federal sports betting ban (PASPA) like New Jersey has.
- Congress passing a law to repeal or amend PASPA.
Those options all are fraught with problems — both on their possible success and drawn-out timeframes.
What we have in front of us immediately is fantasy sports laws. They often contain relatively vague language on what is allowed. Exploiting that language is one of the fastest ways in which states and gaming operators can advance the cause of legal sports betting in the US.
The roadmap for using DFS
The possibility of using DFS to push forward on sports betting has been in play for some time. The problem is that it hasn’t been leveraged to any great degree.
We recently laid out the general roadmap to increased legal US sports betting — which piggybacks on fantasy sports — here. We’ve also put forward more specific methods for using the idea of paid-entry fantasy sports and laws about the industry to create products that are more like sports betting.
I’ve offered how New Jersey should pivot to this method in its attempts to find ways to offer legal sports betting. This is coming to fruition, to some degree, with a product called FastPick being rolled out in Atlantic City.
Quite simply, any casino or gaming operator that registers or gets a license in a state that has passed a fantasy sports law could theoretically use this path. We’ve laid out the the types of bets that fantasy sports laws authorize here and here.
About the only limiting factors under fantasy sports laws? Performances of athletes must be involved in bets/contests offered, and the wager/contest can’t be based on the outcome of a single game.
Beyond that, the only limits are one’s imagination on how to construct bets and contests based on athlete performance.
What’s next in the short term?
The movement of using fantasy sports to get closer to sports betting can happen on several fronts:
- Casinos and gaming operators should start using fantasy sports laws to their advantage. Pari-mutuel fantasy operator USFantasy is in sportsbooks in Nevada and in Colorado, a state where fantasy sports were expressly legalized. Resorts in AC is doing it in New Jersey. Paddy Power Betfair bought a DFS platform. Others should get into the game. For instance, William Hill has registered under fantasy laws in a couple of states but hasn’t yet moved forward.
- Companies should keep creating different fantasy-esque/sports betting products. The more of these products exist — and the more they creep up to the line of single-game wagering — the sillier the federal sports betting ban looks. Fantasy sports laws essentially allow for against-the-house prop bets on players. And state regulators have no reason — or real recourse — to push back as long as a game/bet/contest adheres to statutory guidelines.
- Core DFS operators should continue to create games that are simpler. FanDuel and DraftKings have both created simpler versions of their core products: Mix-up at FanDuel, and Arcade Mode at DraftKings. Innovation is good for the DFS industry. Products like these help move the pro sports leagues toward being on board with things that are less like traditional fantasy.
- More states that are interested in sports betting should pass fantasy sports laws: West Virginia and Michigan are among the states where sports betting bills have cropped up. Fantasy sports makes an easier entry point for lawmakers eager to move forward.
The bottom line: Interests who want legal sports betting to happen in the US should start using fantasy sports laws to their benefit.
