It’s a game changer!
It’s the sound of a billion balloons going Pop! at one and the same time. Maybe two billion, perhaps significantly more. It was a few years ago that the FSTA asked me to speakat one of their conferences, as they had done in the past. The only difference this time is that it would be a one on one. Fine with me. During the course of same, I challenged the attendees with wonderment of what they were doing there if they intended to compete with muscles and marketing reach of folks like ESPN, CBS, Yahoo! and others of similar size. I also questioned the research that provided statistics that sounded like telephone numbers. How does anyone determine that there are 56.8 million folks in North America that are playing fantasy?
Then, cutting to the chase, along comes the Unlawful Internet Gaming Enforcement Act (UIGEA) with a “carve out of sorts for fantasy play. Understand, if you will and as politics go, this bill was added to another that had nothing to do with it, nothing at all – the SAFE Port Act in 2006s under the cover of darkness with no one watching or caring by its political creator, as in God on earth but not George Burns reincarnated. I will take the presumptive position that you know the conditions that would allow fantasy play for major monies, conditions not really met to date.
That small exclusion, and using the magic word, fantasy, led to what we have today, folks who did what I advised at that conference that led to my never being asked back again…a unique application of simple wagering that the folks behind it dressed up in “fantasy.”
Sort of similar to a scenario, no offense intended, of
“Where are you headed today?”
“Going out to rob a bank.”
“Just like that?”
“Just like that?” “Yup!”
“You’ll be caught and go to jail!”
“Nah, I am going to call it fantasy, maybe a daily effort.”
But that is what those clever folks at FanDuel and Draft Kings did. With the funding each has received from a fortune listing of investors and creating pools from $100,000 to $1,000,000 weekly. All bought into projections entry fees adding up to $3.7 billion this year to $17.7 billion in 2020. Hell, they could purchase Greece, all their islands and still have sufficient monies for a few other small world countries. Chances of their considering a galaxy mount daily.
The listing of companies backing these efforts is a corporate who’s who and they can afford developing losses as the now small group of challengers gets larger and moves from the state level to the Federal.
Right now, the normal among us cannot compete with those on the precipice of competing with the two leaders – Fantasy Aces, DraftDay, Fantasy Feud, Yahoo! and Victic (Amaya’s DraftStars). Other contenders for the title are Alpha De=raft and Vulcan. The predictable play unfolding is simple … reading the current law again, challenging it at the state level like recent floods over here just kept growing (i.e., more states jumping on that bandwagon), federal government joins in and re-evaluates current law – UIGEA.
The two leaders are spending money (not theirs personally) like the objective is a page or two in the Guinness World Book of Records. Picture a snow or rain storm and convert the flakes and drops to dollars. Now you have it. Hard to turn an NFL game on without seeing these two. And, if they do continue, which I doubt will be the case, do not be surprised at seeing a great number of repeat winners.
What Nevada did cast a major 500 watt spotlight on the travesty that DFS is not gambling. The focus is on sports betting, as a friend of mine, David Gzesh, commented recently. Whether the route to success for others is alignment with the regulated sports betting industry is open to healthy debate. What sort of betting – nice word, like wagering, which is more upscale. Requires some degree of skill? In the words of the Yul Brynner version of “The King and I” it is a puzzlement!
Daily fantasy sports is sports betting/ All the cloudy conversation and manufactured interpretation coupled with major money backing from professional leagues will not change that. And, as the opposition to it gains traction watch out for those balloons!!
Part of the solution to all this is to repeal the Wire Act and throw PASPA out with all the other garbage. Sports betting nationally? Skill or not skill? Hmmmmm.
My buddy, Warwick Bartlett, did some research and found that 5% of the fantasy players are to be taken seriously and 80% are, well, whatever you wish to call them. That leaves 15% unaccounted for but no one seems to care so neither shall we…at least, for now. Think of casino play … the whales win sometimes but when they lose they lose big.
DFS, in agreement with Warwick and others, is popular because it is wagering that is allowable. Like poker, there is likely enough time for castles in Spain but villas in Tuscany? Probably not. And if investors decide to take a huge write-off and leave the party…close the lights, Casey!!
Insider trading accusations, lobbying firms in the fray, Justice Department and FBI probes. Not exactly party time. FanDuel joins the Internet Association, a leading D.C. trade group for giants like Google and Facebook. The UIGEA loophole is closing fast. First major party bolt – ESPN suspended sponsorship arrangement with DraftKings. Owners of teams and broadcast networks moved in too hastily.
So, what now?
Games, games, games. Yes, sports is all consuming but the public, particularly the growing younger one, loves games of any sort and the high degree of competition involved, not to mention huge followings and not only individual competitors but teams of high tech members that could crack most governmental secure sites.
As many as 12,000 people descended on KeyArena recently to watch teams of professional gamers square off in the International Dota 2 tournament. At stake in Saturday’s final round was $6.5 million prize, part of an $18 million purse, and the largest in e-sports history. E-sports, as competitive video gaming is known, is big business and is now attracting the likes of Amazon and Microsoft. Increasingly, the Seattle area is a focus of the industry. Tournaments like this one will dish out a combined $71 million in prize money this year, industry tracker Newzoo estimates. The firm expects total global e-sports revenue to pass $250 million this year, fueled by sponsorship deals, sales of merchandise and advertising.
E-sports promoters also highlight statistics showing some video-game matches draw more online viewers globally than the television audiences of major U.S. sporting events. Read that again and change your focus and direction. If it is a good, attractive game with serious prizes and taking total skill you are sitting, right now, on the first wave of what will soon be a hurricane, a good and welcome one.
Late in the last decade, widespread Internet broadband and Web streaming on a global scale made it possible for players to compete from a distance, and for more viewers to tune in. “There was this lightning-in-a-bottle moment” with the arrival of live streaming, said Marcus Graham, a former professional gamer and commentator who works for streaming service Twitch.
Hard evidence of a growing audience drew the attention of advertisers and sponsors, eventually including the likes of Coca-Cola. “Before that, e-sports was footing that bill on its own,” Graham said.
In e-sports, analysts and industry insiders say, advertisers found a way to target an elusive audience: young, typically employed men who spend lots of cash on consumer goods but have unplugged from broadcast television and other popular media. Last year, Amazon.com spent $970 million, the company’s largest-ever acquisition, to buy Twitch. And, recently, Microsoft, historically a minor player in e-sports, put up $1 million in prize money in a bid to boost interest in its Halo franchise.
In short, sports isn’t the only game in town, nor is fantasy. Create a game that these folks want, even with a sports perspective, and you’re close to mining the mother lode. I like vanilla, you like chocolate but strawberry has a hell of a following! DFS is not over but is getting a lot of work in its corner of the ring. Time to turn your attention to other games.
A quick “Thanks” to Melissa Blau, a good friend, super analyst and someone that shares many of the thoughts of yours truly and whose opinions I have used herein.