A patchwork regulatory framework. Take a look at what's going on with online poker. Any poker site that wants to operate in a state that allows it has to comply with that state's regulatory framework. One of the most notable things about this is that states generally only allow you to play players within your own state (I think some states may have compacts that allow inter-state play with other specific states). They may also require the company to be operating within the state itself. So, even if Draft Kings starts a normal bookmaking operation, they can't necessarily just offer those services to players in any state that allows it. A lot of it will depend on how states settle on their regulations.
I just got an email from DraftKings about how stoked they are to make betting through their app completely legal. So I think they are already planning to get it done.
This decision doesn't legalize sports betting. It allows the individual States to do so if they wish. DraftKings is (was?) operating under a loophole in Federal law that allows fantasy sports, and had, until now, the advantage of actual betting being illegal while "fantasy sports" were not.
Now that states can allow betting directly, they can do things like require a gaming license to operate, require a physical location, etc. Many may still prohibit online gambling. Federal law that prohibits online gambling can still also prevent straightforward betting over the Internet.
Nothing, assuming states pass laws legalizing sports wagering in which Draft Kings and the like operate.
The major problem I see is that while the current DK business model must be extremely profitable (just hosting contests that you don't have a stake in and taking a rake), running a sportsbook is an entirely different business. One that typically brings minimal profits and can sometimes bring enormous losses because now they are taking the action themselves. Sportsbooks are not typically profit centers for casinos but loss-leaders to bring in people to buy drinks and gamble on more profitable games.
I'm sure they must have been worried about this happening but probably will try and get out in front of it to become an online bookmaker. My own hot take is that this cannot be viewed as anything but a negative for them. I have to believe it would be very difficult to compete with huge casinos that can build their own platforms and bundle betting with their rewards programs. I also agree with the OP's assumption that most people currently using daily fantasy sites would much prefer to simply bet on games.
>One that typically brings minimal profits and can sometimes bring enormous losses because now they are taking the action themselves. Sportsbooks are not typically profit centers for casinos but loss-leaders to bring in people to buy drinks and gamble on more profitable games.
While this is true for places with competition among sportsbooks, like, say Nevada or the internet, it's not necessarily true for the states. If they start running a sportsbook (either themselves or, more likely, through a contractor) with a monopoly in their particular state, then they'll be able to charge more per-bet than they otherwise could. Instead of the standard 11:10 line, they could charge 12:10 or even 13:10 and they'd still get gobs of bettors wanted to put money down at the only legal game in town.
Is that true for the majority? While I don't play myself, it seems a part of the appeal of fantasy sports (at least football) is the drafting/management of your team.
There's traditional fantasy sports, which take place generally over the course of the season, and then there's daily fantasy, which takes place on a given day or weekend. The former is generally played among groups of friends, usually with money involved, but primarily as a recreational group activity. The latter is played primarily for the purpose of winning money against strangers on the internet. I've played both and while the actual draft event is my favorite part when playing in my league with friends, it's far less enjoyable for me in daily fantasy sports. Daily fantasy is technically a skill game, but it really feels like gambling.
Traditional fantasy sports, where you draft a team and manage them in a set league over a season or multiple seasons, is very different and will still exist because, as you say, it can be fun.
What DraftKings and FanDuel provide is basically a loophole in the federal law which made gambling via fantasy sports legal. You draft a new team every day, and gamble that your team will do better on that particular day than other people. It's kind of a pain in the butt to do, when what you really want is to just watch the games and root for one team...
I just got an email from DraftKings about how stoked they are to make betting through their app completely legal. So I think they are already planning to get it done.
It will legalize DraftKings I believe on a state-by-state basis. This was a law I understand pushed by Nevada casino/bookmakers who wanted a monopoly on this to protect their profits.
There was already a federal exemption because of the way daily fantasy was constructed (it was considered a game of skill not tied to the win/loss of a sports team, since you had to pick individuals from different teams). However, several states made it illegal.
Yeah, with DFS (daily fantasy sports) you're even limited to x number of players from a given game, so that you're not effectively betting on the outcome of that game by selecting an entire team.
I never really understood how they got around the limitation with stuff like NASCAR, where you really are essentially betting on the outcome of a single race. Maybe it's like PGA where the tournament is the culmination of a set of matches or something.
It's big for them. When you signed up for, and logged into DraftKings (or FanDuel) you would have to list your state/it would detect your state. I was never in a state that barred sports gambling, but I suspect it would block access if you were.
