FanDuel CEO Nigel Eccles said he believes government regulation is necessary for the daily fantasy sports industry moving forward.
The comments came via a letter from Eccles to all FanDuel users. Full text here.
“A number of smart, but tough proposals in various state legislatures have begun to emerge, which I believe can serve as the basis for the sensible regulation of the fantasy sports industry,” Eccles wrote.
“The proposals include requirements for age and location verification, segregation of user funds, protection of user information, safeguards against use of proprietary contest information and requiring third party audits. These are steps I have always advocated for – and now is the time to memorialize them in law for FanDuel and the entire industry.”
Control board doesn’t go far enough?
Eccles released the letter just a day after the Fantasy Sports Trade Association announced the creation of the self-regulatory body for the industry — the Fantasy Sports Control Board.
From Eccles’ email (full text here, and below):
That said, it has become apparent to me that our industry has grown to a size where a more formal, industrywide approach is needed. To be clear, our industry needs strong, common sense, enforceable consumer protection requirements to ensure its continued growth and success. A number of smart, but tough proposals in various state legislatures have begun to emerge, which I believe can serve as the basis for the sensible regulation of the fantasy sports industry. The proposals include requirements for age and location verification, segregation of user funds, protection of user information, safeguards against use of proprietary contest information and requiring third party audits. These are steps I have always advocated for – and now is the time to memorialize them in law for FanDuel and the entire industry.
We hope to work with legislative leaders in each state to ensure you, our fans, maintain access to the fun and excitement you have come to love at FanDuel.
Eccles offered additional thoughts on the FSCA in an interview with the Wall Street Journal:
He said a plan announced this week by the industry’s trade group to police itself with an outside control board is positive but doesn’t go far enough. “Consumers want a higher level of protection,” he said in an interview. “They need to know it’s fair, that the information is protected. If the consumer doesn’t trust the industry than the business doesn’t exist.”
DraftKings, in the wake of Eccles’ comments, offered the following statement to Legal Sports Report:
As we’ve said in the past, we are committed to working with the Fantasy Sports Control Agency, the FSTA and our partners in the industry, as well as all relevant government authorities, to ensure that our industry operates in a manner that is completely transparent and fair for all consumers. We are seeing a number of state regulators and other authorities taking a reasoned and measured approach to the daily fantasy sports business and hope that trend continues along with due consideration for the interests of sports fans across the country who love to play these games.
States with DFS action or legislation
As Eccles alluded to, there are several states where daily fantasy sports is already being considered by state legislatures:
- Illinois introduced a new bill — the Fantasy Contests Act — this week that sets up a regulatory framework and is considered to be industry friendly.
- Massachusetts is considering what to do as far as a possible regulatory framework. Attorney general Maura Healey brought up the possibility of a ban in the legislature, which had not been floated, previously.
- California has an active piece of legislation.
- Pennsylvania is considering what to do with DFS, as well.
What Eccles wrote to FanDuel users
Here is the full text of the email:
Dear FanDuel Fans,
Over the last few weeks, the fantasy sports industry has received quite a bit of attention. I wanted
to take a moment to communicate directly with you, our players, to update you on what we are
doing to ensure you can continue to enjoy FanDuel. And, most importantly, to thank you for
your ongoing support and confidence in our company.
At FanDuel, we are proud to have transformed fantasy sports and are inspired every day as we
watch our young business change the way fans watch and engage with their favorite sports. In
the same way that Netflix transformed television and StubHub transformed the ticket
marketplace, FanDuel is transforming how fans engage in their favorite sports.
Fantasy sports will continue to evolve, and we remain focused on being the leader in that
evolution by constantly seeking to deliver new and better experiences for our players. We are
incredibly excited for what the future holds.
We all know fantasy sports are often a bond shared by friends, family, coworkers and others, and
as I write, our team is experimenting with a number of innovative social features to further
community building and help the growing number of fantasy fans from around the country
connect with one another. Some of these features also will simplify the ability to play against
and challenge your friends on the site.
We recently relaunched FanDuel Insider, with a full editorial staff, providing premium content
on fantasy expert advice and breaking news. Our acquisition of numberFire will add even more
tools for you to research lineups and players, since we know from many of you that researching a
lineup is often the most fun part of playing the game. In short, we are only at the outset of
transforming what the fantasy sports experience can be.
In any disruptive fastgrowing industry, important questions are often raised about how the
industry should operate – fantasy sports is no different. Real questions have emerged. At
FanDuel, we have always believed in taking a leadership role in protecting users and in how our
industry operates.
It’s why I personally drafted the Fantasy Sports Trade Association’s original paid operator
charter, which defines our industry’s principles for protecting the integrity of the game and the
fantasy experience – from segregating player funds to ensuring compliance with existing state
and federal law.
It’s why we asked former federal judge and United States Attorney General Michael Mukasey to
evaluate our internal controls, standards and practices. He is conducting a review of all areas of
our operation to identify ways we can further ensure we are protecting all players.
It’s why we are forming an advisory board led by former United States Attorney for the Southern
District of New York Michael Garcia, to provide ongoing advice, recommendations and
guidance to guarantee the integrity of our site and games.
In short, we have always been committed to protecting our players and the industry as a whole,
and we will continue to be.
That said, it has become apparent to me that our industry has grown to a size where a more
formal, industrywide approach is needed. To be clear, our industry needs strong, common sense,
enforceable consumer protection requirements to ensure its continued growth and success.
A number of smart, but tough proposals in various state legislatures have begun to emerge,
which I believe can serve as the basis for the sensible regulation of the fantasy sports industry.
The proposals include requirements for age and location verification, segregation of user funds,
protection of user information, safeguards against use of proprietary contest information
and requiring third party audits. These are steps I have always advocated for – and now is the
time to memorialize them in law for FanDuel and the entire industry.
We hope to work with legislative leaders in each state to ensure you, our fans, maintain access to
the fun and excitement you have come to love at FanDuel. The commissioners at the top
professional sports leagues including the NFL, the NBA and MLB share support for sensible
regulation of fantasy sports that protects consumers, without sacrificing their enjoyment of the
game.
We know this is an important issue for many of you, evidenced by the overwhelming outpouring
of support in recent weeks. In the past two weeks more than 145,000 of you signed our petition
seeking to protect your right to play fantasy sports. We believe smart regulations should be in
place, but some lawmakers are seeking to prohibit your right to play fantasy sports as you know
it. We need to remind officials how deep and wide the support for fantasy sports is across the
country. If you have not already, please sign our petition here.
Thank you again for your continued support of FanDuel and fantasy sports.
Nigel Eccles
CEO, FanDuel
Past comments from FanDuel and DraftKings
In the wake of increased media and government scrutiny of the DFS industry in the past month, both FanDuel and DraftKings have moved toward welcoming oversight for the industry, although Eccles’ new comments are by far the strongest so far.
Both sites made statements that generally supported the Illinois legislation to the Wall Street Journal that stopped just short of calling such a law necessary. The CEOs of both companies — Eccles and DraftKings’ CEO Jason Robins — also welcomed the formation of the FSCA.
Earlier in October, both sites said they were open to the idea of regulation. From a FanDuel statement on October 7:
We also look forward to speaking with regulators across the nation about how to define the right set of rules for our industry as it continues to grow.
Robins, responding to a question on Outside The Lines on ESPN about whether regulation is inevitable, early in October:
You know, I don’t know if it’s inevitable, but if that’s the decision that the government makes, we’re open to that. I mean, anything that will help provide an environment that people feel comfortable and safe, I’m happy to partake in and, you know, right now I think all we can do is continue to try to put the best possible policy and procedures in place, and whether or not there’s official regulation, that’s what we’re going to do. And if the government decides that regulation is the best way of ensuring that we’re doing that, then we’ll accept that and we’ll do every bit of our best to comply.”
Also of note: DraftKings has applied for and received a gaming license in the U.K.; Robins said in comments today that he expects a December launch.
