Daily fantasy sports protest

By Jesse Spector

NEW YORK — The scene outside New York attorney general Eric Schneiderman’s office in lower Manhattan on Friday morning was comical, supporters of daily fantasy sports chanting “GAME OF SKILL! GAME OF SKILL!” and holding pre-printed signs with such proclamations as “SCHNEIDERMAN IS A BUST,” “GET YOUR LAWS OFF MY LINEUP” and “SCHNEIDERMAN SHOULD FOCUS ON REAL PROBLEMS.”

The lack of awareness of the last sign, from protestors outraged about fantasy sports, was palpable in a week when students rallied against institutional racism and the free commuter paper in the New York subway, AM New York, had a preview of the fantasy sports protest right across the page break from the previous day’s protest by Doctors Without Borders against Pfizer’s high drug prices.

For the protestors, though, there was a real issue: their own jobs. The fluorescent green t-shirts they wore, which said “#FANTASYFORALL” on the front and “PROTECT YOUR RIGHT TO PLAY” on the back, came in boxes that were stacked on the curb on Broadway and marked “FanDuel – Emily XL” and “FanDuel – Emily Large.”

FanDuel was providing the t-shirts, most protestors did not want to be interviewed on the record. There was a further hint of the makeup of the crowd when one t-shirt wearer called out, “Who’s here from Scout?” and a half-dozen people raised their hands. It was not so much a protest for the sake of fantasy sports as it was for people’s jobs, and that is a real problem.

“We will do everything we can to stay open in New York,” FanDuel CEO Nigel Eccles told the audience at the DFS Players Conference, a convention that had already been scheduled for weeks before the protest, in Times Square after the protest. “Legal, legislative and any other avenue that we have. … I think everybody in the room knows it’s a game of skill, but if you want to say it’s a game of chance just so you can put it in consumer protection, let’s talk about consumer protection. … We’re on board with legislation. We think it needs to be appropriate, and don’t think casino-style legislation would be good. We want to protect consumers, and want the industry to be safe, because there’s billions of dollars going through the system.”

Eccles was preaching to the choir, pre-paid conference attendees. The panels at the convention, such as “Bankroll Management,” led by someone called Dinkpiece; “MLB Tournament and Qualifier Strategy,” led by CheeseisGood; and “The Process of a Top Cash Game Player,” led by Lucror, did not lend much of an air of legitimacy to the proceedings. Besides being led by people using aliases, they could easily be seminars at a poker convention.

In one of the sessions led by someone willing to use his real name, "MLB Modeling," ESPN fantasy insider Derek Carty went so far as to use a poker term, "fish," to describe players against whom an advantage could be gained by making use of statistics. Carty also inadvertently made an argument parallel to the case against daily fantasy compared to full-season fantasy. Batters' individual performances against pitchers, he said, should largely be ignored because of the small sample size. Using Paul Goldschmidt's dominance of Tim Lincecum as something of an exception to prove the rule, Carty argued that a hitter's numbers against an individual pitcher usually had more to do with luck than skill, and thus should not be used for any sort of predictive purposes.

The presentation was thorough, informative, and loaded with smart ways to look at baseball. It just happened to be in the framework of gaining an advantage in a gambling enterprise. Carty said that he preferred playing daily fantasy baseball on DraftKings over FanDuel, a happy endorsement for the official daily fantasy game of MLB. FanDuel is the official DFS outlet for the NBA, while the NFL does not have an official partner -- its teams do. 

Earlier, on the street, most people passing by the protest shook their heads in annoyance at the blockage of a sidewalk that already had a construction shed taking away pedestrian space. One man was sure the protest was phony, just set up for a TV show. A police officer laughed, and said that the one protest he could remember that was more ridiculous was one against Wendy’s for poorly-sourced tomatoes.

At the heart of the issue here was whether daily fantasy sports is a legal game of skill or an illegal game of chance. In the cease-and-desist letter to DraftKings, Schneiderman wrote, “Our review concludes that DraftKings’ operations constitute illegal gambling under New York law, according to which ‘a person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence.’ DraftKings’ customers are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes.”

Schneiderman drew the distinction between daily fantasy sports and legal, full-season fantasy sports, on both the challenge of full-season players competing over a full season, requiring strategy along the way, and on the difference in the business model: the attorney general wrote, “the Internet sites that host traditional fantasy sports receive most of their revenue from administrative fees and advertising, rather than profiting principally from gambling.”

“It’s skill,” said Chris, a protest participant who declined to give his last name. “Everybody talks about how you’re putting money in and getting money out, and that’s gambling. Well, that’s only two parts of the equation. In every state, there’s three parts to it: putting in money, getting payout — which, obviously, is the case here — but there’s also the skill component, and that’s the crux of the argument. If you’re having an argument about whether it’s gambling or not, that should be the focus, whether it’s skill or luck. We believe it’s skill, and I think that’s pretty clear.”

Wearing a Mario Lemieux 1983 Laval Voisins jersey, Nik Bonaddio was one of the few protest participants willing to speak on the record. Bonaddio is the founder and CEO of numberFire, a sports analytics company that FanDuel bought earlier this year.

“You can draw a pretty clear correlation between the state shutting it down and jobs,” Bonaddio told Sporting News. “This is an industry that supports a lot of different people. Not just the people that run these games, but you’re talking about TV viewership, you’re talking about even markets like sports bars and things like that. Fantasy sports only serves to make sports more interesting and get people more involved. It’s a super short-sighted thing to just say, ‘oh, it’s just gambling, it’s just a game of chance.’”

There is a leap to make in the logic of what Bonaddio is saying. Just because daily fantasy sports is a thriving industry that is pumping tons of money into every facet of sports — from direct sponsorship of leagues to money for TV and print ads (including at Sporting News) to ancillary and anecdotal effects of increased attendance at bars — does not mean that it’s not gambling. Money is being wagered, won and lost in these games, and there certainly is an element of chance. Whether that element overrides the element of skill involved is where the legal question comes in.

In full-season fantasy sports, deemed to be legal, the element of skill is much clearer in that players have to manage a roster over a full season, making trades and adjusting accordingly when elements of bad luck, such as injuries, occur. In a daily game, players set their rosters and watch how it plays out.

“I wouldn’t disagree with you that it is a different game,” Bonaddio said. “But anybody who’s played can tell you that it’s not easy. It’s like the stock market. You’re not making one decision, it’s eight or nine decisions in pairs, so that makes it a total of 55 billion decisions you can make.”

The question is where the math settles the line for the law. Blackjack is a game of chance, but a skillful player can use strategy to improve the odds of winning, and really advanced players can count cards to get an even greater advantage. If the legal standard is fuzzy and open to interpretation, and some games are OK but not others, the law itself probably should be questioned.

That brings up the real question as this issue moves forward: should sports gambling just be legalized? We’re 96 years out from the Black Sox scandal, and the prohibition of betting on sports has not stopped point-shaving and match-fixing from happening entirely. There will always be a risk of that, legal or not, and now that professional sports are getting a taste of the cash that sponsorship from DraftKings and FanDuel brings in, might they be more open to embracing a well-regulated sports gambling industry? European sports are awash in gambling money, with plenty of soccer teams that go so far as to wear gambling sites’ logos on their jerseys. Of course, the American sports market has teams that have sponsorship deals with casinos.

“That sort of discussion is above my pay grade,” Bonaddio said.

In the meantime, Schneiderman’s pay grade requires him to act as he has, under the law. It’s up to the daily fantasy sports industry to push for the law to change.

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