Online poker is dead. So says some pundits. Much of this has been a result of overbearing regulatory measures and Government intervention. And one writer warns daily fantasy sports could suffer the same fate as Web poker.
Bill Beatty of CalvinAyre.com writes:
Daily Fantasy Sports has exploded in popularity over the past couple of years due to a lack of regulation, a fervent desire for people to gamble, it’s turned regular people into millionaires, DFS is touted as a game of skill and it’s presence seen and felt all over the sports networks, so much so that it has politicians and anti-gambling nuts up in arms calling for bans. DFS meteoric rise and its lack of regulation could force the US government to enact some sort of limits or ban that could crush the burgeoning industry.
Sound familiar? Beatty asks.
It should to any reader who has followed the online poker space for some time.
In or around 2004 the online poker boom resulted in dozens of new sites cropping up, all claiming to be a “game of skill” as opposed to other forms of gambling such as sports betting and casino games. Failure to attract a large enough player pool coupled with Government restrictions led to the ultimate demise of all but the strongest businesses (i.e. PokerStars, iPoker and PartyPoker).
When the US Government passed the Unlawful Internet Gambling Enforcement Act back in 2006, there were carve outs for both horseracing and fantasy sports but it’s clear the politicos didn’t realize that fantasy sports would evolve so much to allow gamblers a daily fix of what is essentially sports betting, Beatty warns.
One of the original co-authors of UIGEA echoed that sentiment.
“My intent in initiating the law was to constrain a growing gambling ethos in America that could bring the casino to the home, the work station, college dorm, even the treadmill,” UIGEA co-author and former Rep. Jim Leach (R-IA) recalled. “My concern was that a savings and investing country could too easily become a country where too many would bet wantonly on unrealistic hopes of obtaining a big payoff, a number of Members indicated they couldn’t support it if it didn’t make a minor exception for fantasy sports,” Leach said he reluctantly agreed to add the exemption “on the assumption that nothing in the endeavor could be used to incentivize corruption of any actual sports contests being played.”
It’s also clear that most of today’s emerging daily fantasy sports sites are woefully underfunded, relying on a constant stream of hungry investors. Once interest begins waning and the money sources disappear, sites like DFS911.com anticipate a mass purging of the industry.
“DFS Sites are just as unregulated as offshore online poker sites, but just because they’re legal, doesn’t mean they’re safe,” Americas Cardroom CEO Phil Nagy told Pokerfuse.com recently. He would later relay these same thoughts to Gambling911.com. “I think it’s concerning that these companies have openly admitted that they are not profitable, and yet players don’t seemed to be concerned for the safety of their funds.”
As for the Game of Skill argument operators of daily fantasy sports sites and Internet poker sites before them routinely raise in order to try and distinguish themselves from the so-called “real gambling” options available, Beatty provided this thought-provoking anecdote: “When those in the industry describe DFS as a skill game, they aren’t kidding. Sports bettors know the skill and research it takes to successfully handicap a game or a prop. If you’re a sports bettor who hasn’t tried DFS, it’s closest comparison would be betting on player performance props with a caveat that makes it much more difficult to win.”
– Vito Conti, DFS911.com