A look at daily fantasy sports: a game of skill or a game of gambling?

A look at daily fantasy sports: a game of skill or a game of gambling?

By Ashley Richmond | arichmond@whbf.com

Published 02/07 2016 10:17PM

Updated 02/07 2016 11:33PM

It's a lot more than a hobby for millions of people. Fantasy football plays a huge role in how Americans enjoy football.
 
But some state lawmakers are now focusing on a different aspect of the game- daily fantasy sports.
 
In Illinois, the attorney general wants to make it illegal for you to play on fantasy betting sites like DraftKings and FanDuel.
 
But across the river in Iowa, lawmakers are working to legalize daily fantasy betting. They're hoping to regulate the games and tax the income.
 
On the surface, its easy to see the appeal of one-day fantasy sports leagues, but research shows those promises of big, easy money... Don't always come true.
 
Consulting firm McKinsey & Company looked at a sample of bettors for the first half of the major league baseball season in 2015. What they found- the top 1% of players paid less than half the total entry fees, but reaped 91 percent of the profits.
 
Meanwhile, the players in the bottom 80 percent paid an average of $49 in entry fees and lost half that cash. That means the average player isn't winning- they're actually losing half the money they paid in; but the sites need those lower-level players to bet and play a lot... Even if they don't win. That fact is what worries problem gambling counselors like Blair Brown.
 
"It's so accessible. They don't even have to walk out of their house. That's kind of why they continue to go back. A lot of times its not even about the money anymore, it's about the feeling that you get when you win. And when you can actually go back and get that feeling every day... or you might not win but you're searching, you're searching for that feeling over and over again. You might continue to lose, but you're still searching for that same feeling," said Blair Brown, Alcohol and Drug Dependency Services of Southeast Iowa.
 
The daily fantasy kingpins say what people are doing on their sites isn't gambling. They say it's not a game of luck, but rather a game of skill.
 
"If you're risking anything of value, and you're uncertain of the outcome, that's gambling. It's gambling, no matter how you put it," said Brown.
 
Late last year, Illinois State Attorney General Lisa Madigan released her opinion that daily fantasy sports was illegal gambling, under state law. Madigan sent notices to both DraftKings and FanDuel, saying they can't operate in Illinois.
 
The sites promptly filed complaints, seeking damages and saying their operations are not violating Illinois' criminal code.
 
Local 4 News reached out to both FanDuel and DraftKings, but neither site responded to multiple requests to be interviewed for this story.
 
"I just want to make sure that those that maybe have an issue with gambling have a way not to go onto those sites, and that we have regulations there that prevent them from losing everything," said Illinois State Representative Mike Smiddy, 71st District.
 
In Iowa, it's a different story.  Betting on daily fantasy sports sites is currently illegal in the Hawkeye state, but lawmakers have been working on a bill to make it legal.
 
"We're not opposed to daily fantasy sports in Iowa but it needs to be regulated. It needs to have consumer protections. What is the appropriate minimum age to be able to participate? We need legal clarity that casinos could be able to offer this as well. So there's several unanswered questions before any bill should go through," said Wes Ehrecke, President and CEO of the Iowa Gaming Association.
 
The catch? If daily fantasy sports betting is made legal in Iowa, the Ehrecke says daily fantasy sites may have to follow some of the same requirements and standards that the casino industry does, despite the fact that those sites adamantly say daily fantasy sports is not gambling.
 
The Illinois Fantasy Contests Act is going through the Illinois General Assembly now. The Act establishes requirements for how fantasy contests should operate in the state. It's been referred to the house Rules Committee for approval before being considered.
 

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