DFS Amounts To NFL-Sanctioned Gambling, According To Fantasy Convention’s Lawsuit

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The company that is suing the NFL for its role in a canceled fantasy sports convention aggressively positions daily fantasy sports as league-sanctioned gambling.

The basics of the lawsuit

The company Fan Expo LLC is seeking $1 million in damages from the NFL for its part in the cancellation of the National Fantasy Football Convention, which was supposed to take place earlier this month at a facility that is part of the Venetian resort in Las Vegas.

The news of the lawsuit was broken by ESPN’s Darren Rovell.

The lawsuit describes the events that led to the cancellation of the event:

However, just weeks before the inaugural event, the NFL placed a series of intimidating phone calls to players, their families, their agents, and the NFL Players Association (“NFLPA”), threatening that the players would be fined and potentially suspended from the NFL if they participated in the event. … As a direct result of the malicious and groundless threats made by the NFL, numerous players and media personnel withdrew their participation from the convention, and it became impossible for the NFFC to execute the July 2015 event.

The NFL put forth that players attending the event would be violating league policy, because the event was being held at a “gambling-related establishment.” Fan Expo, in the suit, argues that no gambling actually takes place at the convention center itself and the event was not sponsored by the casino, making the NFL’s interference baseless.

Where DFS enters into the lawsuit

Beyond claiming the event was not in violation of NFL policy, the lawsuit goes on to say that the “NFL’s actions reek of hypocrisy.” A section dedicated to the NFL’s relationship to casinos and gambling is headed: “Perhaps most appalling, history shows the NFL’s hypocrisy and selective enforcement of its policy against casinos and gambling.”

In that section, the lawsuit continues on to say: “In fact, the reality is that when the NFL gets a piece of the pie, the NFL flagrantly and systematically violates its own supposed policy against casinos and gambling. Countless examples show the NFL’s true attitude toward betting.” Among those examples listed is the league’s relationship with FanDuel (bolding for emphasis, not a part of the lawsuit):

In 2015, fifteen NFL teams signed a deal with FanDuel, a fantasy football gaming website. During Sunday NFL football, FanDuel’s most popular game results in a $500,000 prize to the winner of an NFL fan pool.

DFS is equated to gambling yet again

This is certainly not the first time that DFS has been called “gambling” or “betting,” and won’t be the last. When Yahoo launched its DFS product earlier this month, several high-profile media outlets wrote about DFS using those terms.

This is not even the first time that a DFS site has been called “gambling” in a court filing: A class-action lawsuit in Florida referred to DraftKings as a “fantasy sports gambling business.” Former NBA commissioner David Stern has called DFS “gambling” on more than one occasion.

It’s interesting that an organization attempting to promote fantasy sports and profit from its existence would link DFS with gambling, although clearly its losses from the cancellation of its first-ever event were sizable. If politicians or government attorneys started thinking of DFS as a gambling activity — or called for it to be treated as such — the result could be potentially devastating to the industry.

Every weapon at Fan Expo’s disposal — including FanDuel’s ties to the league — is being deployed. And it seems safe to assume that FanDuel — which tries to make sure it doesn’t run afoul of the law as much, if not more, than any other DFS site — is not terribly excited about being lumped in with forms of gambling.

The National Fantasy Football Convention has been slated to take place for the first time next July, in Los Angeles.

The league’s reaction will be…?

This high-profile lawsuit puts DFS on the hot seat yet again because of its perceived similarities to gambling, while the industry continues to fight to hold on to its status as a game of skill, and its perception as such in the mainstream. (A recent DFS player survey revealed that 42 percent of respondents believed daily fantasy contests constitute gambling.)

There’s a potential that the endgame could be a good thing for the DFS industry. For the league to fight the lawsuit, it must do so on two fronts: The location of the convention, and the charges of “hypocrisy” on gambling levied by the lawsuit.

On the second front, the NFL might go on the offensive on behalf of daily fantasy sports. In that scenario, the NFL would have to become much less tepid about its relationship to DFS, forcing the league to defend it as a game of skill. And that’s not a stretch to believe, seeing as news also came out yesterday that the NFL’s lawyers have argued that sports betting is a game of skill.

The league, even without a direct partnership with a DFS site, has a vested interest in propping up the industry of daily fantasy sports. NFL teams just split $7.2 billion in revenue sharing, much of which comes national media deals. Viewership numbers continue to climb for the NFL, at least in part because of season-long and DFS players. The league wasn’t likely to throw DFS under the bus, even before this lawsuit.

Of course, what the league is going to do isn’t known yet; a league spokesman told Rovell that it wasn’t even aware of the lawsuit yet. It seems unlikely that the league would settle the lawsuit, and that it wouldn’t defend itself with guns blazing. And that could help the league get off the fence in terms of its stance on DFS.