This Week In Daily: May 22, 2015

Posted on May 22, 2015
Posted By on May 22, 2015

“This Week In Daily” is LegalSportsReport’s weekly wrap of key facts, happenings and miscellany from the daily fantasy sports industry.

Stories of note

No Pending IPO for DraftKings?

DraftKings CEO Jason Robins appeared on CNBC to talk about the growth of DFS and DraftKings. There wasn’t really anything in the way of a bombshell in the segment on “Mad Money.” But he did say this about the prospect of an IPO:

“Right now we are looking at a lot of different options, but that’s probably the last thing on our mind. We’re just trying to build a great business and engage sports fans.”

We would guess that doesn’t preclude the possibility of an IPO this year or next, but it sounds like it’s not in the cards for the immediate future.

Game on in Kansas

A bill that legalizes daily fantasy sports crossed the finish line in Kansas, as Gov. Sam Brownback signed the legislation into law.

In reality, the law changes little, as pretty much all DFS sites operated in the state already. But it does clear up the law in Kansas, so no one playing fantasy for real money in the state has any reason to worry.

It’s a good example of momentum behind DFS legalization, as several other states consider legislation as well.

More money for eSports daily fantasy

The amount of money invested in eSports fantasy websites increased to $17 million in a little over a month, as the fantasy platform AlphaDraft got $5mm in funding. That comes on the heels of a $12mm round for another fantasy eSports site, Vulcun.

The growth of the sector has been astronomical, as DFS for eSports basically didn’t exist until this year. And with the new round of funding, it appears that AD and Vulcun are headed toward a duopoly much like FanDuel and DraftKings.

Of the week

Read(s) of the week

“You’re Busted: Fantasy Sports and the Need for Adult Supervision”

Richard Schuetz, a commissioner for the California Gambling Control Commission, presented a case that the DFS industry should actively seek regulation, before someone does it for them.

Telling DFS sites that they should self-regulate or go to state governments to “prime the pump” for regulation, Scheutz paints a bleak picture for the industry if it lets governments set the agenda for the industry.

There’s still not a lot of momentum for regulating the industry, but that doesn’t mean that that sentiment couldn’t change quickly if a few key lawmakers decide DFS is akin to gambling. Clearly, the industry would like to stay on a path of no regulation or self-regulation, it appears. But will that be a reality?

“Federal Lawyer Says Sports Leagues Likely To Dominate U.S. Market”

This is another story looking at the potential future of DFS. It’s a fascinating premise:

The NFL and other major professional sports leagues will eventually own companies like FanDuel and DraftKings and dominate the U.S. daily fantasy and sports-betting markets, according to assistant U.S. Attorney Aaron Zelinsky of Maryland.

“But the reality is that that’s the way [the leagues] are going to make their money — they’re going to own the book.”

It certainly makes sense. Leagues could operate the sites and make money (or operate them at a loss or as a break-even proposition, if necessary) and obviously have a vested interest in the fan engagement DFS creates. It will be interesting to see if this prediction comes to fruition.

Tweets of the week

Watch of the week

Mad Money’s Jim Cramer of CNBC interviews DraftKings co-founders Jason Robins and Matt Kalish:

Number of the week

$9 million

The amount of prizes two eSports daily fantasy sites — AlphaDraft and Vulcun — plan to award this year. That number seems likely to grow. The vertical didn’t exist until this year.

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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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