NEW YORK — What do you do if you’re in the daily fantasy sports industry and you’re being investigated by the New York State attorney general, with numerous investigations underway examining unregulated online gambling, beset with charges of insider trading?
Your $4 billion industry works with its lobby to take to the streets, cobbling together an astroturfed protest under the guise of a “grassroots” movement.
Friday morning, a few hundred individuals, many of them employees of FanDuel, DraftKings, RotoGrinders.com, and other associated fantasy sports-based sites, gathered outside AG Eric Schneiderman’s office to chant at a few security guards standing in front of a building. They yelled “Let us play” and “Game of skill,” referring to the carve out in the Unlawful Internet Gambling Enforcement Act of 2006 which exempts daily fantasy sports from the bans on online gambling.
The group ostensibly organizing the event, Fantasy Sports For All, seems to consist solely of a single webpage containing a form to petition Scheiderman’s office. But if you look closer, in the upper righthand corner, you’ll see a tiny logo for the FSTA.
What is the FSTA? It’s the Fantasy Sports Trade Association. They raise “awareness on critical fantasy sports industry issues,” hold annual conferences, lobby on behalf of the over 300 member organizations, and even have their very own PAC. Their board of directors includes representatives from FanDuel, DraftKings, ESPN, Yahoo! Fantasy Sports, and CBS Sports Digital.
The FTSA has also been roped into daily fantasy’s legal issues, having “received a grand jury subpoena in a continuing federal investigation into the legality and practices of the fast-growing fantasy sports business,” according to The Wall Street Journal.
When The Daily Beast emailed the protest’s organizer through their EventBrite invitation, a cheery reply arrived from a public relations manager at FanDuel.
After the initial email, the representative did not respond to The Daily Beast’s request for comment.
DraftKings also sent an email to its New York users, encouraging them to attend. DraftKings, too, did not respond to a request for comment.
So the protest was never the “grassroots” effort the industry is attempting to project, nor the one many media organizations reported on Friday. CNN, for example, cited “300 fans crowding the sidewalk” in their story “We want to play! Fantasy sports fans protest New York ban.”
Those 300 “fans” were out in force because Schneiderman ordered FanDuel and DraftKings, the sites that represent 95 percent of the daily fantasy sports market, to cease and desist operations in New York State. “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” he wrote.
Schneiderman’s notice, coming a few short weeks after Nevada became the first state to declare that daily fantasy was, in fact, gambling, represents a serious threat to what has become a still-growing $4 billion industry.
They’ve parlayed that financial windfall into partnerships with Major League Baseball, the National Football League, The National Basketball Association, the National Hockey League, and Major League Soccer, as well as countless individual teams, and carpet-bombed the airwaves and broadband space with ads for their product.
At this point it’s almost impossible to watch a game of any kind on TV without being inundated with their spots, all of which make the claim that a few shrewd picks can transform your average, fantasy-obsessed dude into a bajillionaire overnight.
During the NFL’s opening weekend they dropped over $20 million in ad buys, outspending every other advertiser, and are on pace to rack up “more than $100 million on commercials this year.”
And that’s just the commercials that are clearly commercials. Take a gander at ESPN’s pregame NFL programming this week and it’s often hard to tell where they end and daily fantasy advertisements begin.
“The clash was especially, starkly apparent on a recent Monday afternoon, When ESPN aired three of its daytime football talk shows in a row: NFL Primetime, NFL Insiders, and then NFL Live,” Daniel Roberts wrote at Forbes. “The first was sponsored by DraftKings, the second was sponsored by FanDuel, the third was sponsored by DraftKings. The sports media blog Awful Announcing wrote that the ESPN program NFL Sunday Insiders last week, ‘was basically a DraftKings infomercial disguised as a pregame show.’”
Much to FanDuel and DraftKings’ dismay, you can’t advertise your way out of a legal bind, hence the decision to hire serious legal heavyweights to represent them, and the desire to create the appearance of a massive, user-led backlash like this morning’s protest.
For the most part, the relatively few non-employees that did show up at 8 a.m. on a Friday were reluctant to speak to the swarm of reporters.
One protester (it was unclear whether or not he worked in the industry) blustered, “Let’s get rid of lottery tickets. That’s certainly not a game of skill. If you’re such a man of moral character, get rid of all lottery tickets. How about that, Schneiderman?” before walking away.
“What’s the point? They’ll just take what I say out of context anyway,” he said.
Those that were in some way employed by the industry weren’t so shy, but they did hew pretty closely to the approved talking points, making sure not to suggest that they were in any way rallying for their jobs.
Tim Griffiths, the head of products at FanDuel, said he was here because he represented “the hundreds of thousands in New York State that do this every Sunday with their friends and their family and don’t want this to be shut down.”
Nicholas Bonaddio, the founder of numberFire, a Moneyball-style analytics site that had been bought by FanDuel, argued that daily fantasy isn’t gambling, but rather “a game of skill that allows you to show who the best sports fan is.”
“The chants that you’ll here today are ‘Let us play’ and ‘Fantasy sports is a game of skill,’” Justine Sacco, the director of communications at FanDuel, told The Daily Beast. (Note: Sacco used to work for The Daily Beast’s parent company, IAC.) “I just think we want to send that message loud and clear.”
That message didn’t filter down to Dee, a user who estimated that he’d made somewhere in the “high three figures” playing daily fantasy over the last two months.
“I’m a former online poker player,” Dee said. “And the truth is, DFS stole online poker sites’ interfaces. So I know how the competitions and tournaments work. Basically, you look for a guaranteed tournament where there’s a low amount of entries. If there’s a low amount of entries and it’s a guaranteed tournament, your odds go way up.”
Chris, who came all the way from Indiana, suggested that if these sites were forced out of business, it would be yet another blow to individual liberty.
“It’s always frustrating to have freedoms and everything taken away,” he said. “So in that regard, it would be disappointing to have to give back freedoms that people have fought for and all that kind of stuff. I don’t know.”
It’s a sentiment that mirrors FanDuel’s early stab at political messaging, a quickly deleted tweet from Thursday morning that read, “If politicians are going to tell you that you can’t play fantasy sports, what will they tell you next? #FantasyForAll fantasysportsforall.com.”
There are arguments to be made in favor of daily fantasy, although they were lost amidst the on-message PR pabulum recommended by the events’ organizers. For one, Schneiderman didn’t need to unleash the nuclear option. If daily fantasy is industry that requires regulation, USA Today’s Nate Scott argues to do that instead of cratering the industry altogether.
“Daily fantasy has existed for the last two years in a legal gray area, operating in a loophole that has allowed them to come in and make massive amounts of money,” he wrote. “They are doing so while other American gambling operations exist in a world of regulation and oversight.”
Of course, it’s hard to book a Good Morning America slot by slogging through complicated negotiations and legislation, and daily fantasy represents a relatively soft, PR-friendly target for an attorney general with say, aspirations for higher office.
By nine-ish, the crowd in front of Schneiderman’s office had almost completely dissipated. Even though FanDuel’s Tim Griffiths declared that “We will be here as long as it takes to get our message heard,” they had to hustle uptown in order to make it to the $600-a-ticket daily fantasy players conference being held at the Marriott.