Frank Pallone (D-New Jersey), who was eager to point out the hypocrisy of the U.S.in the way it treats sports betting and DFS.
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“Yet in the USA, both companies maintain that daily fantasy sports is not gambling”, Pallone told Peter Schoenke, the witness representing the Fantasy Sports Trade Association.
Bottom line, Wednesday’s hearing was exclusively an opportunity for Pallone to air his sports betting arguments on a slightly larger stage, but it’s doubtful whether his anti-PASPA argument achieved anything other than providing emotional support for sports betting backers in his home state.
The companies argue that they should not be treated as gambling because their games rely more on skill than on chance.
All four major United States sports leagues have a vested interest in the result of the hearing and the future of FanDuel and DraftKings.
“I don’t really think you can argue differently without being laughed at”, Pallone said.
Congress seems poised to do little regarding daily fantasy sports in the wake of a hearing regarding the industry on Wednesday.
A handful of committee members queried the panel – which lacked representatives from FanDuel, DraftKings and the major sports leagues – about protecting the average daily fantasy player from algorithms used by elite players that tilt the odds in their favor, and the patchwork of state laws that now govern how the daily fantasy is regulated.
Pallone and others in Congress have sought to explore why Major League Baseball, the National Basketball Association, the NHL and several NFL teams have invested in or partnered with the companies despite the legal uncertainty around the industry and their opposition to legalized sports wagering in an ongoing federal court case involving Pallone’s home state of New Jersey.
It’s not uncommon for companies to send trade associations as representation in initial Congressional hearings, but the absence of the leading DFS operators is notable.
He also mentioned his concerns about the way that professional sports leagues have sued to stop legalized sports gambling in his home states while tacitly or explicitly supporting the daily fantasy sports websites.
Pallone requested the hearing in September, after a barrage of advertising for daily fantasy hit the airwaves and DraftKings and FanDuel came under fire for allowing employees to participate in cash games on other sites. The NFL also declined the invite as did NBA, NHL and MLB – three leagues that have partnered and even purchased stakes in either FanDuel or DraftKings. For fantasy sports operators, this is certainly good news, as they will not be required to register, nor they will be taxed. “Hopefully they’ll get back to us with an answer”. However, Americans are betting on sports more than ever, primarily online with illegal offshore sportsbooks and independent local bookmakers.
The move to legalize fantasy sports in Minnesota is in line with a general understanding that DFS should be included the law in a balanced way.
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“This is a huge, multi-billion business that’s mostly underground”, Pallone said, “and it leads to criminal activity and we need to address it and make it legal”.
