Jonathan Kraft — president of the NFL’s New England Patriots as well as DraftKings investor Kraft Group — said that the daily fantasy sports industry should be regulated in an interview on Sunday night.
What Kraft said about DFS
Kraft, the son of Patriots owner Robert Kraft, was speaking on 98.5 The Sports Hub, according to a report at ESPN.com:
“Fantasy sports is pretty much a part of mainstream culture now in our country and I think it’s a nice element of what we have and I think it should be regulated as well.”
He also talked about “yelling out of Washington about how this is an unregulated industry,” noting that Congress made DFS legal — presumably referring to the 2006 Unlawful Internet Gambling Enforcement Act. He also noted he thoughd that both DraftKings and FanDuel “welcome the oversight” and that regulation is the “right next step.”
FanDuel in an earlier statement said it was looking “forward to speaking with regulators across the nation.” DraftKings CEO Jason Robins has said in recent interviews that his company would be open to regulation.
The comments are of particular note since it is almost certainly the first time a major daily fantasy sports investor has said the industry should be regulated. In fact, the venture capital behind the industry generally doesn’t speak about the industry much at all. The exception has been North America’s major professional sports leagues, which have nearly all partnered with either DraftKings or FanDuel (except for the NFL).
The Kraft Group, the NFL and DFS
The Kraft Group was a part of DraftKings latest funding round, a Series D round worth $300 million. The extent of the Kraft Group’s investment is unknown. About half of that was funded by Fox Sports, according to reports on the funding round in July.
DraftKings has a fantasy sports lounge at the Patriots’ home stadium, and the site also sponsors tight end Rob Gronkowski.
The Wall Street Journal recently reported on some of the investments behind the two DFS behemoths.
The statements from Kraft come against the backdrop of growing calls for Congressional hearings into DFS. It also comes as the NFL had been described as trying to “ward off” such a hearing. An NFL spokesman later walked back that portrayal when talking with ESPN, saying the NFL was “informing [Congressional] staff that the league and clubs have no equity interest.”
Twenty-eight of the league’s 32 teams have deals with one of the major DFS sites, but there is no over-arching partnership between the league and either DraftKings or FanDuel.
Whether Kraft’s comments can be read as tacit support for DraftKings and DFS moving forward from the NFL is an open question.
All of this in the backdrop of Massachusetts
The commonwealth is uniquely situated and in many ways in the middle of the debate over daily fantasy sports. The Patriots, the Kraft Group and DraftKings are all based in Massachusetts, and government officials there have been paying as much attention to DFS as nearly any state. Consider:
- Attorney General Maura Healey said daily fantasy sports are legal in the state, after concluding a review that DraftKings had asked for.
- House Speaker Robert DeLeo advocated for Massachusetts to generate revenue via DFS without calling directly for regulation.
- Senate President Stan Rosenberg said the industry should be taxed and regulated.
Much like Nevada made a statement with its finding that DFS constitutes gambling under state law, there’s a very real chance that Massachusetts can set the agenda for states that want to consider DFS legislatively. An ideal outcome for the industry could include regulatory terms that are friendly to DFS while still creating some of the oversight observers believe is needed.
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