How Will Divergent Approaches To Sports-Related Gaming Issues Impact Macro eCommerce and Regulatory Approaches…?

October 29th, 2015 – Ian J. Imrich, Esq. 

The fantasy sports business in the US is largely unregulated. A handful of states have made it illegal to play fantasy sports for money and a few have laws making it expressly legal. None have in place a framework for regulating operators. Concurrently, traditional sports-betting (except for in a handful of States –notably Nevada) is illegal throughout the US.

On the one hand, the NBA has taken a progressive approach to regulatory measures for sports-related gaming activity in the US; meanwhile, the NFL maintains its vigorous opposition to legalization of traditional sports-betting, but seems to have painted itself into a corner regarding its contradictory and hypocritical “skill” arguments with respect to traditional sports-betting as compared and contrasted to fantasy sports betting of the daily, weekly, and other less than seasonal gaming.   See, e.g., http://espn.go.com/chalk/story/_/id/13268458/documents-show-justice-department-nfl-argued-skill-sports-betting

FanDuel has now embraced State-by-State regulation in the US in order to protect DFS consumers while DraftKings appears ready to dig in (perhaps emboldened by 2 powerful NFL owner-investors?) and by all appearances will resist any efforts by States to regulate DFS — relying instead on trade association self-regulation. See, http://www.wsj.com/articles/fanduel-ceo-calls-for-government-regulation-1446127412?cb=logged0.2795360852977816

Speaking of powerful sports-related owner-investors, recently, yet another NBA owner has joined two other NBA power-brokers on another sports-related venture: to wit, Ted Leonsis, who now owns the Wizards, the Capitals and Verizon Center, on last Tuesday announced that his Revolution Growth partnership is joining fellow NBA team owners Jordan, of the Charlotte ­Hornets, and Mark Cuban, of the Dallas Mavericks, in an investment in the Swiss technology firm ­Sportradar.

Sportradar collects data from more than 325,000 live sporting events across the planet, ranging from darts to tennis and from soccer to snooker.  Sportradar digests that data, then sells it to big media companies such as Google and Fox Sports, to fantasy sports leagues, and to gaming and gambling businesses. See, http://www.washingtonpost.com/business/capitalbusiness/ted-leonsis-team-with-michael-jordan-mark-cuban-in-sports-tech-investment/2015/10/27/84ef7f06-7cd9-11e5-b575-d8dcfedb4ea1_story.html

In any event, with a convergence of sports-betting related investments and other strategic business alliances being forged whilst the consumers, media, and the government simultaneously review the DFS industries, it begs the question —  how will these dramatically divergent approaches to DFS (and to sports-betting in general) between two major sports leagues play out as the ongoing State and Federal investigations of Daily Fantasy Sports (DFS) ominously loom in the background…?

I guess all of us are about to find out…

Stay tuned!

–IJI

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