4 ms·

I still find it hard to understand why fantasy sports that pays money to winners is different from bookmaking. Betting on players instead of teams is hardly dif

I still find it hard to understand why fantasy sports that pays money to winners is different from bookmaking. Betting on players instead of teams is hardly different; all you are doing is narrowing the odds a little. You are still betting money for a chance to win money. Maybe people think it's more like playing Powerball.

jegutman 11y ago
Here's the simplest explanation. Neither should be illegal, they made a law that explicitly banned one and not the other. Also there's fundamentally a difference between playing against other players and playing against the house. If the professionals on draft kings / fan duels got to play the house in a similar setup it would be even worse for the people playing for fun. Why are people allowed to go to the movies? In New York a movie ticket is $15 and 90% of the movies are, in my opinion, absolute crap. So that's $15 with a 10% chance of getting your moneys worth and a 90% chance of losing all of it and 2 hours your time! I think the one reason why it's different for the leagues is that daily fantasy doesn't really create as large of incentives to throw games or rig games as much from the refs or players point of view (not that it's common, but it's definitely happened in the past).
- eterm 11y ago
  In betting exchanges you also bet against other people (with the house taking a cut, as with DFS), but those are banned under gambling regulation.
  - ssharp 11y ago
    Some online sports books used to operate betting markets where you'd essentially buy options on teams, with the price of the option being determined by the demand. The house would make money on the spread. The fundamental difference between why that's illegal and betting on daily fantasy football is not, is simply that the anti-online gambling laws of the U.S. specifically allowed for betting on fantasy football and outlawed other types of gambling. When that law came about, I believe in 2007, daily fantasy football either didn't exist or was extremely niche. It really took a few years before big players like Draft Kings and Fan Duel got substantial traffic. When the law came about, there were a lot of small players who came and went.
    - kasey_junk 11y ago
      Its actually more specialized than that. When the gambling law was written fantasy sports was given a specific exemption because traditional fantasy was so popular. The daily sites saw this exemption and developed games that push the envelope as closely as they possibly can. They've even added rules about not picking too many players from the same team as they are worried about that being perceived as a violation. The entire industry has been 1 jump ahead of legislation its whole short existence. In some ways they have been incredibly savvy, for instance they have financial backing from some of the biggest players in the US sports markets. That they allowed this idiotic behavior by the employees to go on for so long is boneheaded on an epic scale.
- dbot 11y ago
  I'm not going to disagree, but...we are chemically-driven machines. Gambling triggers addictive releases of pleasure/pain that aren't equivalent to most other forms of entertainment. Most forms of gambling are successful because they are excellent at delivering random reinforcement to players, which is key to many addictive behaviors. But the games themselves are not intrinsically interesting to most people. DFS takes applies the same principles of gambling and couples it with the most popular sport in the country.
  - jegutman 11y ago
    I agree with your general assessment. I think one sane area for regulation is tracking large losers and having mechanisms to help addicts create self-enforcement (banning themselves effectively). However, I think the mobile gaming industry is probably just as responsible in this way. Clash of clans has people spending 50k+ per year (outliers of course) on the game and also tries to trigger a similar gambling-style positive feeling. They also are some of the most effective mobile advertisers tracking individual customers all over the internet. Do you think these "whales" get enough control on how they're targeted by companies?
jonknee 11y ago
It's because bookmaking is a game of chance while fantasy sports (daily or not) is considered a game of skill. Ironically bookmaking is much more fair for the average person than daily fantasy, but that's not how the government sees it.
- kasey_junk 11y ago
  Thats what they used to justify the difference in the law, but any other form of sports gambling seems to meet the same standard. For that matter, the daily sites have devolved into a sort of prop bet parlay. My own personal subjective opinion is that blackjack, craps and especially poker all have higher skill to luck ratios than the daily fantasy games. Especially with the rake set the way it currently is.
  - sokoloff 11y ago
    Fully agree with you on poker. Mild agreement on blackjack. Complete disagreement on craps. Could you describe the "skill-based winning strategy" for craps? (Other than "don't play")
    - kasey_junk 11y ago
      Craps has negative ev but it is pretty small playing the no-pass line. My hypothesis is that the rake is so high on daily fantasy that any "skill based" positive ev is more than swamped by the cost of playing. So the daily fantasy sites are essentially lotteries where you need very abnormal winnings to make up for the rake.
- ssharp 11y ago
  There are still people who can statistically make money betting sports, so I'd be hard-pressed to call that any less of a game of skill than daily fantasy sports or poker. For a long time, professional sports leagues in the US were extremely anti-gambling because they didn't want to be associated with it and they were worried about integrity. However, the NFL got in bed early-on with fantasy sports, so they didn't fight things when it became clear that daily fantasy sports were becoming more popular, despite clearly being gambling. Now, the NBA has come out in support of bookmaking. They were an interesting league to do that since one of their refs was caught tampering with games a few years ago. However, analytics in the NBA have become extremely sophisticated (they have tech that tracks every step each player makes), and looking back at the data, they could have caught that ref much earlier based on data. So I'm assuming they are confident enough in the analysis to thwart any tampering and are now trying to get into bed with the sports books in efforts to increase their revenue.

jegutman 11y ago

Here's the simplest explanation. Neither should be illegal, they made a law that explicitly banned one and not the other. Also there's fundamentally a difference between playing against other players and playing against the house. If the professionals on draft kings / fan duels got to play the house in a similar setup it would be even worse for the people playing for fun. Why are people allowed to go to the movies? In New York a movie ticket is $15 and 90% of the movies are, in my opinion, absolute crap. So that's $15 with a 10% chance of getting your moneys worth and a 90% chance of losing all of it and 2 hours your time! I think the one reason why it's different for the leagues is that daily fantasy doesn't really create as large of incentives to throw games or rig games as much from the refs or players point of view (not that it's common, but it's definitely happened in the past).

eterm 11y ago
In betting exchanges you also bet against other people (with the house taking a cut, as with DFS), but those are banned under gambling regulation.
- ssharp 11y ago
  Some online sports books used to operate betting markets where you'd essentially buy options on teams, with the price of the option being determined by the demand. The house would make money on the spread. The fundamental difference between why that's illegal and betting on daily fantasy football is not, is simply that the anti-online gambling laws of the U.S. specifically allowed for betting on fantasy football and outlawed other types of gambling. When that law came about, I believe in 2007, daily fantasy football either didn't exist or was extremely niche. It really took a few years before big players like Draft Kings and Fan Duel got substantial traffic. When the law came about, there were a lot of small players who came and went.
  - kasey_junk 11y ago
    Its actually more specialized than that. When the gambling law was written fantasy sports was given a specific exemption because traditional fantasy was so popular. The daily sites saw this exemption and developed games that push the envelope as closely as they possibly can. They've even added rules about not picking too many players from the same team as they are worried about that being perceived as a violation. The entire industry has been 1 jump ahead of legislation its whole short existence. In some ways they have been incredibly savvy, for instance they have financial backing from some of the biggest players in the US sports markets. That they allowed this idiotic behavior by the employees to go on for so long is boneheaded on an epic scale.
dbot 11y ago
I'm not going to disagree, but...we are chemically-driven machines. Gambling triggers addictive releases of pleasure/pain that aren't equivalent to most other forms of entertainment. Most forms of gambling are successful because they are excellent at delivering random reinforcement to players, which is key to many addictive behaviors. But the games themselves are not intrinsically interesting to most people. DFS takes applies the same principles of gambling and couples it with the most popular sport in the country.
- jegutman 11y ago
  I agree with your general assessment. I think one sane area for regulation is tracking large losers and having mechanisms to help addicts create self-enforcement (banning themselves effectively). However, I think the mobile gaming industry is probably just as responsible in this way. Clash of clans has people spending 50k+ per year (outliers of course) on the game and also tries to trigger a similar gambling-style positive feeling. They also are some of the most effective mobile advertisers tracking individual customers all over the internet. Do you think these "whales" get enough control on how they're targeted by companies?

jonknee 11y ago

It's because bookmaking is a game of chance while fantasy sports (daily or not) is considered a game of skill. Ironically bookmaking is much more fair for the average person than daily fantasy, but that's not how the government sees it.

kasey_junk 11y ago
Thats what they used to justify the difference in the law, but any other form of sports gambling seems to meet the same standard. For that matter, the daily sites have devolved into a sort of prop bet parlay. My own personal subjective opinion is that blackjack, craps and especially poker all have higher skill to luck ratios than the daily fantasy games. Especially with the rake set the way it currently is.
- sokoloff 11y ago
  Fully agree with you on poker. Mild agreement on blackjack. Complete disagreement on craps. Could you describe the "skill-based winning strategy" for craps? (Other than "don't play")
  - kasey_junk 11y ago
    Craps has negative ev but it is pretty small playing the no-pass line. My hypothesis is that the rake is so high on daily fantasy that any "skill based" positive ev is more than swamped by the cost of playing. So the daily fantasy sites are essentially lotteries where you need very abnormal winnings to make up for the rake.
ssharp 11y ago
There are still people who can statistically make money betting sports, so I'd be hard-pressed to call that any less of a game of skill than daily fantasy sports or poker. For a long time, professional sports leagues in the US were extremely anti-gambling because they didn't want to be associated with it and they were worried about integrity. However, the NFL got in bed early-on with fantasy sports, so they didn't fight things when it became clear that daily fantasy sports were becoming more popular, despite clearly being gambling. Now, the NBA has come out in support of bookmaking. They were an interesting league to do that since one of their refs was caught tampering with games a few years ago. However, analytics in the NBA have become extremely sophisticated (they have tech that tracks every step each player makes), and looking back at the data, they could have caught that ref much earlier based on data. So I'm assuming they are confident enough in the analysis to thwart any tampering and are now trying to get into bed with the sports books in efforts to increase their revenue.