One of the main takeaways of this move? The daily fantasy sports company that used to be more conservative legally than competitor DraftKings is apparently less concerned about applicable federal law now.
FanDuel tweaks golf
A couple of months after going live with its new golf product, FanDuel already announced it was switching things up:
Setting your FanDuel Golf lineup is simple. Select any 8 golfers for that week’s entire tournament. If a golfer fails to make the cut, he won’t receive any more points for the rest of the tournament — so you’ll need the right combination of stars and sleepers to stay under the salary cap.
With a unique scoring system, users earn fantasy points based on a variety of individual scoring categories and bonuses for specific achievements. Additionally, instead of picking golfers who earn points over an entire tournament users pre-select golfers to compete in Rounds 1 and 2 and then a different group to compete in Rounds 3 and 4.
Initially, FanDuel indicated that its contests intended to create a different game, strategically, from DraftKings’ product. But it also seemed like it was meant to create a buffer, legally, under federal law.
But it now appears that was never part of the calculus. Either that, or FanDuel shifted when it realized making its golf contests simpler was a good idea.
What FanDuel used to say about golf
FanDuel CEO Nigel Eccles used to espouse the idea that single-tournament golf contests could run afoul of the Unlawful Internet Gambling Enforcement Act, or UIGEA.
The reason some think fantasy golf resides in a murky area legally is in the UIGEA’s language. While the 2006 law carves out fantasy sports from its definition of gambling, it insists that accumulated player statistics must be derived from “multiple real-world events.”
Parsing the meaning of that phrase — and the rest of the UIGEA — has been at the heart of the DFS industry for the past decade. One golf tournament, one could argue, does not constitute multiple events.
DraftKings — and apparently now FanDuel — would argue that that phrase could cover any number of things: the four rounds of a tournament, or holes played by the golfers. Even golfers’ shots could be “events” under such an argument.
What we do know is that Eccles used to question the legality of DraftKings’ golf product:
“We won’t be introducing fantasy golf. I think it is commercially attractive (it’s probably our next most requested sport) but I’m uncomfortable with the legality of it. Every time I have to make a decision like this I think whether the argument would stand up in court. To me a reasonable person would consider a golf tournament to be a single event, not multiple events.
Therefore it would not fall under the UIGEA safe harbor. That does not automatically make it illegal (it may still be a game of skill under state law) but it does make it more risky.”
There’s been no pushback on the UIGEA
Why has FanDuel changed its tune?
Well, for one, there’s really been no legal pushback — at least that’s publicly known — on golf or other similar products being in violation of the UIGEA.
Going even further, the variety of state laws covering DFS that have gone into effect mimic UIGEA language. So if single-tournament golf is fine under the UIGEA, the same would hold true in states that use basically the same language. No state with a DFS law on the books has taken any issue with single-tournament golf to date.
Finally, if all goes according to plan, FanDuel and DraftKings are going to merge in a few months. That merged company is certainly going to offer single-tournament golf like DraftKings has for years. It’s \ a good idea for the two platforms to start looking more similar sooner rather than later.