Frank Pallone and Bob Menendez Want a Hearing to Discuss the Link between DFS Contests and Sports Betting.
On Tuesday, U.S. Sen. Frank Pallone and U.S. Rep. Bob Mendendez held a press conference at MetLife Stadium to renew their calls for a hearing on the connection between sports betting and daily fantasy sports. The lawmakers, both from New Jersey, are calling for fairness in the way sports wagers are placed in the United States. Sports betting is banned in 46 states under the 1992 PAPSA law, while daily fantasy sports is considered legal under the 2006 UIGEA law.
Both discussed what they consider the hypocrisy of the American sports leagues, who embrace daily fantasy sports while claiming legalized sports betting would damage the integrity of their games. Teams in the NFL, MLB, NBA, and NHL all have sponsorship deals with DraftKings and FanDuel, while three of the four leagues have direct partnerships with one of the main DFS sites. Meanwhile, those same leagues are involved in a lawsuit with the state of New Jersey over its attempt to legalize sports betting at Monmouth Park, in anticipation of allowing sportsbooks in the Atlantic City casinos.
DraftKings-FanDuel Controversy
Pallone and Menendez chose to have a press conference in light of the recent controversy involving a DraftKings employee who placed second in one of FanDuel’s NFL Sunday Million events. The second-place finish netted the player, Ethan Haskell, $350,000 in winnings. After he showed the draft percentages of his players on Twitter, controversy erupted over whether he used privileged information on DraftKings about draft percentages to gain an unfair advantage in the FanDuel contest.
The New York Times ran an inflammatory article which compared the event to insider trading. The New York Attorney General called for a probe and demanded to know the names and job descriptions of the people who handle statistics at FanDuel and DraftKings. A U.S. Attorney in Tampa said he would call a grand jury to see if daily fantasy violated laws in Florida. Meanwhile, the two companies at the heart of the trouble announced they were banning employees from playing in such contests in the future. They also issued a joint statement denying any wrongdoing in the Ethan Haskell situation.
With such an event commanding the public’s attention, a press conference by the Jersey lawmakers was a good chance to score points with the public. It was not the first time Sen. Pallone had called for hearings about the link between sports wagering and daily fantasy football, though.
Frank Pallone Writes Letter to GOP Committee Members
Late last month, Frank Pallone (a Democrat) sent a letter to Republican members of the Energy and Commerce Committee, calling for a hearing on “the relationship between professional sports and fantasy sports, to review the legal status of fantasy sports and sports betting.”
Sen. Pallone said in his letter, “Anyone who watched a game this weekend was inundated by commercials for fantasy sports websites….These sites are enormously popular, arguably central to the fans’ experience, and professional leagues are seeing the enormous profits as a result.”
Pallone, who is the ranking member of the Energy Committee, continued: “Despite how mainstream these sites have become, though, the legal landscape governing these activities remain murky and should be reviewed.”
NFL Lobbies to Avoid Hearing
According to a report from Politico, the NFL does not want a hearing and is lobbying members of Congress to assure no hearing about daily fantasy football ever happens. FanDuel appears to be in prevention mode, too. It has hired a James Barnette and Lisa Mortier, a pair of lobbyists from the Steptoe & Johnson law firm. James Barnette, a partner at the firm, has close ties to Rep. Fred Upton (R-MI), who is the chairman of the Energy and Commerce Committee.
Politico suggested the lobbying effort from the NFL and FanDuel came after Rep. Pallone’s calls for a hearing in the committee.
The article reads, “After learning of Pallone’s push, the NFL’s D.C. office–which recently hired a onetime aide to former House Majority Leader Eric Cantor (R-Va.)–began contacting House members to try to ward off a hearing, according to another House Energy and Commerce aide. The NFL is reeling from other confrontations with Congress on issues ranging from player safety to domestic violence.”
DFS Has the Support of the Sports Leagues
The NFL is doing what appears to be in its best interests, but its efforts on Capitol Hill are a boon for the daily fantasy sports league. Given FanDuel and DraftKings have closer corporate ties to the Major League Baseball, the NBA, and NHL, it only stands to reason that the American sports associations are likely to put their weight behind the industry, too, which is much different than their role in the sports betting debate.
NFL Explains Its Position
Asked to explain the apparent contradiction in the NFL’s position, league spokesman Brian McCarthy released this statement: “Daily fantasy is considered a game of skill. There’s no league sponsorship agreement or investment in those companies. Clubs may accept traditional advertising within their controlled media properties, including TV, radio, digital, print and stadium signage, provided no club or league marks are included in such advertisements.”
NFL Commissioner Roger Goodell has professed the same opinion in public. After the Ethan Haskell story became known, Commissioner Goodell provided his own opinion on the matter. Saying fantasy football cannot be fixed (rigged) because it is a “mashup”, Goodell said it was “hard to see the influence that it could have on the outcome of a game because individual players are picking different players from different teams, mashing them up, you might call it. [I]t’s not based on the outcome of a game, which is what our biggest concern is with sports betting.“
