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FanDuel CEO Nigel Eccles is looking into offering fantasy sports contests for golf — after once saying his company would avoid the vertical — according to an interview with RotoGrinders.
In comments from 2014, Eccles said FanDuel “won’t be introducing fantasy golf” and cited issues with its legality. Clearly, something has changed for FanDuel, and that is likely the realization that fantasy golf is a lucrative market.
In light of that, is there a way to reconcile Eccles’ statement about avoiding fantasy golf with his comments from today?
Appearing on the RotoGrinders podcast with Dan Back, Eccles talked about a wide variety of subjects. The most interesting involved daily fantasy golf, which exploded this year behind DraftKings’ efforts and its “Millionaire Maker” contests around the four major golf championships.
Back noted that a survey was sent to FanDuel players, including questions about fantasy golf, and Back asked about the prospects of FanDuel following DraftKings and other operators into the golf vertical.
Here is part of his response:
“Golf is a very strong No. 2 sport. I’d say we treat golf like any other feature enhancement. We really kind of say ‘Look, what’s going to deliver the biggest bang for the buck?’ Is it going to be golf — which last year there really wasn’t a strong business case — against enhancements of the interface, that would drive benefit to all the users, rather than just golf players.
This year, I think the business case is stronger, and so again, our guys are out surveying, saying ‘Look, if we were to do it, how would it look’… so it’s on the radar. I can’t really say there is anything imminent.”
You can listen to his comments here; the golf question and answer start at about the 8:30 mark.
Whether we’re going to see golf at FanDuel in some form in 2016 or beyond is an open question. But Eccles’ recent comments came after it appeared last year that FanDuel had no designs on fantasy golf.
Many had assumed FanDuel was reluctant to offer fantasy golf because some believe it falls under a gray area of the federal Unlawful Internet Gambling Enforcement Act. That is based on the fantasy sports exemption in the UIGEA, which says a fantasy contest must be based on accumulated player statistics in “multiple real-world events.”
A daily fantasy golf contest almost always takes place over the course of one tournament, so the argument is that each of the four rounds, or perhaps each player’s individual rounds, meets the “multiple events” standard.
And on the fantasy golf front, Eccles’ comments on the podcast stand in stark contrast to a post he made at the RotoGrinders forums last year:
“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.”
Of course, Eccles didn’t expressly say that he believes daily fantasy golf is legal — at least as it is offered at DraftKings and elsewhere — in the interview with Back, either. It’s possible to parse Eccles’ statements and find a way for FanDuel to have its cake and eat it too.
If a DFS contest for golf were to take place across two or more golf tournaments, instead of just one, that would certainly have a far better legal argument under the UIGEA. But that route is problematic from an execution standpoint, and might not be nearly as popular as the commonly run “one tournament” contests that already exist. But consider this scenario:
There are a variety of professional golf tournaments held from spring through fall, at a variety of different levels — the PGA Tour, the PGA European Tour, the LPGA Tour, the Champions Tour and the Web.com Tour. FanDuel could construct tournaments based on two or more of these tours’ events from the same weekend, and it would be much more at ease under the UIGEA.
If, however, FanDuel would one day roll out contests that look exactly like DraftKings’ offerings, it would be difficult to reconcile Eccles’ two statements and his previously stated view on the legality of DFS for golf.
In a sidenote from the podcast, Eccles also noted that FanDuel has designs on international markets, which is not terribly surprising for a company that is largely based in Scotland. More from the podcast:
“There’s huge opportunity internationally. I’d say in 10 years time, maybe only 40 percent of our revenues would come from the U.S.”
That stands in contrast to its current situation, as FanDuel operates only in the U.S. and Canada, with a presumably small portion of its revenue coming from the latter. Eccles didn’t offer much in the way of details as far as FanDuel’s plans for international expansion.
He went onto say that a FanDuel daily fantasy product in the U.K. might not look exactly like FanDuel does in the United States.
DraftKings earlier announced it had received a gaming license in the U.K., with plans to launch later this year.