DFS Industry Discussion Thread

[Joe Tall]

Since the NBA thread is being run over with general industry discussion I figured we should start an industry thread.

Coincidentally, Indiana Introduced the first bill that mentions legalities of Fantasy Sports on the state level.

See the law here: https://iga.in.gov/legislative/2015/...ument-35bb9ef3

cliffs - my thoughts:

• Follows UIGEA closely, in fact it misses one stipulation "players must be from more than one event" - good
• targeted toward land based - neutral
• declares Fantasy sports a "gambling game" - bad
• establishes age restriction for 21+ - good

I am going to ask the mods to move the NBA posts in here, hopefully they oblige.

[losing all2]

Figures I just moved to Indiana. This is the first I've heard of any potential legislation. Seeing the word gambling and knowing how religious it is here doesn't exactly give me the warm and fuzzies.

[DrawNone]

posts 2320-2374 are the discussion, 2318 is the ? that started it.

[RonMexico]

Do we really want land-based casinos getting their filthy hands on fantasy sports?

[CalledDownLight]

Originally Posted by RonMexico

Do we really want land-based casinos getting their filthy hands on fantasy sports?

I would think this would be a great thing since they have the money to start a price war on rake and advertise heavily to get more fish depositing.

[IlluminatedK]

Originally Posted by RonMexico

Do we really want land-based casinos getting their filthy hands on fantasy sports?

nope.

[cs3]

Seems like it would be a great thing. More competition = better product and better prices

[Biesterfield]

Anyone know anything more about these series of tweets?
https://twitter.com/WALLACHLEGAL

Specifically:

"Common misperception about legality of fantasy sports: it's not only skill vs. chance--must also examine whether entry fees make up prizes"

"In many states and under UIGEA, fantasy sports would be considered illegal if entry fees make up prize, even if deemed a contest of skill"

"Predetermined prize enables DFS to argue that entry fees do not constitute prize and thus no bet or wager"

[JHair]

Originally Posted by Biesterfield

Anyone know anything more about these series of tweets?
https://twitter.com/WALLACHLEGAL

Specifically:

"Common misperception about legality of fantasy sports: it's not only skill vs. chance--must also examine whether entry fees make up prizes"

"In many states and under UIGEA, fantasy sports would be considered illegal if entry fees make up prize, even if deemed a contest of skill"

"Predetermined prize enables DFS to argue that entry fees do not constitute prize and thus no bet or wager"

Industry executives believe this position is rock-solid on a federal level.

[Joe Tall]

Originally Posted by Biesterfield

Anyone know anything more about these series of tweets?
https://twitter.com/WALLACHLEGAL

Specifically:

"Common misperception about legality of fantasy sports: it's not only skill vs. chance--must also examine whether entry fees make up prizes"

"In many states and under UIGEA, fantasy sports would be considered illegal if entry fees make up prize, even if deemed a contest of skill"

"Predetermined prize enables DFS to argue that entry fees do not constitute prize and thus no bet or wager"

Under UIGEA for a Fantasy Contest to be legal using real money the prize pool must be stated in advance. Unlike a poker tournament where the entry fees, as more players join, grow the prize pool. Therefore the entry fees and prize, in DFS, are separated.

[Joe Tall]

Originally Posted by JHair

Industry executives believe this position is rock-solid on a federal level.

It is, here is the law:

In this subchapter:

(1) BET OR WAGER. The term 'bet or wager'–
(A) means the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome;
(B) includes the purchase of a chance or opportunity to win a lottery or other prize (which opportunity to win is predominantly subject to chance);
(C) includes any scheme of a type described in section 3702 of title 28;
(D) includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering; and
(E) does not include–
(i)…(viii)
(ix) participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:
(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
(III) No winning outcome is based–
(aa) on the score, pointspread, or any performance or performances of any single real world team or any combination of such teams; or
(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.

[cjkalt]

Originally Posted by Joe Tall

Since the NBA thread is being run over with general industry discussion I figured we should start an industry thread.

Coincidentally, Indiana Introduced the first bill that mentions legalities of Fantasy Sports on the state level.

See the law here: https://iga.in.gov/legislative/2015/...ument-35bb9ef3

cliffs - my thoughts:

• Follows UIGEA closely, in fact it misses one stipulation "players must be from more than one event" - good
• targeted toward land based - neutral
  
• declares Fantasy sports a "gambling game" - bad
• establishes age restriction for 21+ - good

I am going to ask the mods to move the NBA posts in here, hopefully they oblige.

wouldn't this mean that you could offset DFS winnings with gambling losses at state level in Indiana... isn't this much better than it being normal income as it is now?

[Joe Tall]

Originally Posted by cjkalt

wouldn't this mean that you could offset DFS winnings with gambling losses at state level in Indiana... isn't this much better than it being normal income as it is now?

Well, technically the Indiana law is for B&M (racinos), so I want to say it doesn't qualify for online DFS. (But check with an Indiana CPA.)

[Biesterfield]

Yeah it's just the way he worded the tweets. I've known about the "state prize pool in advance" thing for years. Regardless, I think it is outrageous that this line of thinking is determining what is legal or not.

[cjkalt]

I guess my point considering DFS a gambling game for most people would actually make it more profitable if you could start offsetting gambling losses.

But exciting world and next year's scale will be unreal

[CohibaBehike]

my accountant has been co-mingling my gambling wins and losses with my DFS wins and losses for 3 years already. Legislatively, it's a grey area.

[JHair]

The other thing is that it seems that everyone who has taken dfs winnings to hr block and the like are being told to file w2-gs

[phillydilly]

FD released Q4 numbers today. WOW.

[Joe Tall]

Originally Posted by phillydilly

FD released Q4 numbers today. WOW.

Slightly higher than the industry predicted:

https://www.fanduel.com/investors

[TomG]

WA State proposing new clarifying legislation:

http://app.leg.wa.gov/billinfo/summa...1301&year=2015

[Priptonite]

Originally Posted by TomG

WA State proposing new clarifying legislation:

http://app.leg.wa.gov/billinfo/summa...1301&year=2015

omg omg omg

edit: seriously made my day, I'm so psyched right now. Even if it fails, at least someone is trying

[Joe Tall]

I was at the Fantasy Sports Trade Association conference last week, held in Las Vegas. The agenda is here: http://www.fsta.org/?Winter2015

I'll try to write a wrap up if I have time. Any direct questions, let me know.

[RonMexico]

Saw a few things you probably saw. There was a trade report that predicted (among other things) the #1 threat facing dfs is quants/grinders. Link below.

https://drive.google.com/file/d/0B1A...LUE/view?pli=1

The biggest risk for DFS industry is NOT regulation, but whether it can attract mass market appeal and avoid becoming too “hardcore”. Namely, FD/DK run the risk of becoming over run by algo’s & quants, which could preclude industry from ever penetrating mass market and achieving our revenue projections.

Also saw a tweet from some FSTA guy whining about the gamblification of dfs.

‏@ODFReport
Ads referencing gambling concepts - like "rake" - are a big problem for the industry's credibility, says @PaulCharchian #FSTA

[Victor]

quants are inevitable. just shows a fundamental misunderstanding of what the incentives motivate.

[Zimmer4141]

I think the biggest problem the industry is going to face is the fact that there is no limit to the amount of entries the best players and therefore closest to optimal lineups can run. When every game down to a $1 10 man SnG is infested by 3-4 of the top players, it will siphon the edge away from everybody else so rapidly that it'll end up being like the post-poker boom but happen way quicker imo.