Sports Betting Looms in the Background during Any Discussion of Daily Fantasy Sports’s Legality.
New Jersey Rep. Frank Pallone has launched a campaign to have a closer look at the legality of fantasy sports. Frank Pallone has been at the center of the sports betting debate in New Jersey the last few years. He senses an opportunity to score points in the debate over PASPA, but it makes for an uncomfortable connection for the daily fantasy sports industry.
Last week, Rep. Pallone wrote the committee with oversight of sports leagues–the Committee on Energy and Commerce–and asked it to look into the connection between American pro sports leagues, daily fantasy sports, and traditional sports betting. He believes the three are closely connected and attempts to deny that (by the leagues) are self-serving.
With Success Comes the Spotlight
The New Jersey representative says the newfound prominence of daily fantasy sports brands like DraftKings and FanDuel led to a spotlight being turned on the industry. As the two major companies jockey for position number one in the DFS market, each has bought a significant number of television, radio, and Internet ads. Prominent online sports news services and affiliate marketers also display advertisements for the companies.
With so much attention being drawn to those commercials, Pallone says the proliferation led to his calls for a new spotlight to be shown on those companies. Of their impact on the American pop culture, Pallone said, “It’s been a gradual process, but I think this is going to put them on the spot if we have this hearing.”
The lawmaker believes any juxtaposition of sports betting with DFS gaming is likely to convince disinterested observers they are similar. DraftKings and FanDuel may have come to the same conclusion, which is why they are quick to point out their games are not sports gambling. Not everyone is convinced, though.
Pallone and LoBiondo
In 2012, Frank Pallone, a Democrat, began working with Rep. Frank LoBiondo, a New Jersey Republican, on legislation which would legalize sportsbooks. That legislation remains locked in committee, with little chance of passage. That has not stopped Sen. Pallone from advocating for legal sports betting at the federal level of government.
Legality of Daily Fantasy Sports
His latest campaign involving the legality of fantasy sports sites like FanDuel and DraftKings plays on a number of factors. One, daily fantasy sports has exploded in popularity, so a discussion of the hobby is certain to garner headlines.
Two, the NFL, Major League Baseball, NHL, and NBA have embraced daily fantasy sports, while shunning traditional sports betting. MLB, NBA, and NHL all have league-level sponsorship deals with either FanDuel or DraftKings, while teams in all four sports have similar sponsorship deals with the DFS companies. For those who see daily fantasy sports as a form of gambling, it would seem the leagues are heavily invested in promoting legal sports betting.
PASPA Enforcement
At the same time, the sports leagues have been adamant about a 46-state ban on sports betting. The Professional and Amateur Sports Protection Act of 1992 bans sportsbooks in all states besides Nevada, Oregon, Montana, and Delaware. In three of those four states, sports gambling is done in what are called “sports lotteries”, leaving a monopoly on traditional sportsbook betting for Las Vegas and Reno.
New Jersey’s state government has been trying to end that monopoly since 2011, when a statewide vote approved legalized sports betting. From 2012 to 2014, the US sports leagues sued New Jersey to enforce the PASPA, saying expanded sports betting would destroy the integrity of their sports.
Charges of Hypocrisy
Though it seemed laughable that Jersey sportsbooks would destroy the integrity of the pro sports, while Vegas betting would not, the federal court system supported the league. When New Jersey changed its laws to better suit one interpretation of the PASPA, it touched off a new round of litigation from October 2014 until the present.
Frank Pallone’s call for a look at the legality of fantasy sports is therefore shining light on the leagues’ hypocrisy. They embrace gambling on the one hand, while claiming such activities would destroy their sports on the other hand.
Three of the leagues might be in the process of changing their stances on the issue, though. In recent months, the NBA, the NHL, and MLB have all indicated their position is shifting, if not changing. The NBA and MLB Baseball each have new commissioners. Hockey’s commissioner admitted sports betting has little impact on pro hockey his sport simply goes along with the others, to support their fellow sports. These are signal moments we’ll look back on as significant, but seem of little note at the time.
The question is: will sports betting be legalized on a national scale in time to head off trouble for daily fantasy sports?
