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Payment Processor to Stop Working with Daily Fantasy Sports Clients
- smaili 11y agoAnyone wonder if this may be the final straw that breaks the camel's back?
- colordrops 11y agoWhich camel?
- smaili 11y agoFantasy Sports
- LargeWu 11y agoCorrection, Daily Fantasy Sports. Regular ol' fantasy sports, where you manage a team over the course of the season is specifically legal. The argument around DFS is that it's not the same as fantasy sports.
- chuinard 11y agoNo, pretty sure fantasy sports is legal because people do it for fun / a bet amongst themselves. Maybe I'm wrong but I haven't seen any season-long fantasy sports sites (like Yahoo) offering millions of dollars in prizes in exchange for your wager.
- mikeyouse 11y agoThere was a specific exemption in the Unlawful Internet Gambling Enforcement Act that allowed for "skill-based" fantasy sports. See 1,e,ix (or ctrl+f "fantasy"): https://www.law.cornell.edu/uscode/text/31/5362 https://www.law.cornell.edu/uscode/text/31/5362 Fantasy betting is explicitly legal as long as it's skill-based, not dependent on a spread, and not dependent on a single game.
- chuinard 11y agoAnd this isn't the same law the 1 days are using? Are you suggesting that DK and FD will end up doing season long paid sports and everyone will be OK with it?
- mikeyouse 11y agoIf they did season-long paid sports, everyone would have to be okay with it since they'd be explicitly legal.. ESPN / Yahoo / CBS all have leagues without issue. I don't think DK/FD can afford to do the season-long versions without significant layoffs and restructuring, they're set up like European gambling houses in terms of staffing and advertising, neither of which are as useful for season-long versions.
- deleted 11y ago[deleted]
- Laaw 11y agoCan't they just get another payment processor? Aren't there dozens, if not hundreds, of payment processing companies out there? Surely someone will pick up these gigantic clients.
- pjsullivan3 11y agoThere are very few processors in the US that will process this type of risk. I'm the founder of a lottery app company called Jackpocket and the compliance / due diligence is ridiculous. Now that DFS is seen as illegal and toxic its going to be near impossible to get someone to underwrite this risk. Time for Bitcoin to shine!
- krinchan 11y agoYes. Because a currency almost completely controlled by Chinese miners who are strangling the network at 1MB blocks, causing transaction times in excess of three hours at peak and just introduced the ability to arbitrarily reverse those transactions during the lag is totally going to handle DraftKings and FanDuel.
- hybridsole 11y agoYep, they should just stick with the current system of 3-5 day transfers, giving over all of your personal information, and being subject to freezing/closure at the whim of authorities with no due process. Bitcoin transactions rarely take more than 30 minutes, including peak times, if you apply a sufficient network transaction fee (right now equiv. to $0.05). It cannot be "arbitrarily" reversed. RBF is not even in production, and if/when it is, it's is a separate type of transaction that is optional and marked as such. China does not control bitcoin, yes they perform most of the mining but it's because China is huge, has cheap electricity, and produces mining hardware. There are a lot of independent actors involved and if there was foul play (which there has not been any evidence of) the network could route around China without too much disruption. Bitcoin is not perfect and it's still in its infancy, but it is improving and it is still more censorship resistant and decentralized than any other form of money.
- vonklaus 11y agoFinally the government is taking action against these companies. Think about it, these guys provide the ability to wager on the outcome of a basket of performance statistics. The government is totally right to classify this as gambling and not skill based wagering. Plus, these things have no underlying value at all, just structured binary outcomes based totally on short term results. What other institution in America is allowed to create non-collateralized chance options markets out of thin air and float them to the public? This is unprecedented. These guys are clearing millions. Could you imagine what woild happen ifit was billions or trillions? I bet that would make for a pretty volatile environment.
- toomuchtodo 11y agoI didn't realize the sarcasm until near the end. Well done.
- brwnll 11y agoWhile humorous, this is nonsense, and a complete mischaracterization of what a stock market actually is. A stock market is a place where a group of businesses are able to offer ownership stakes in their company in exchange for cash. The fact that people have built a speculation market around it is very different than a gambling wager. If you buy stock and it decreases in value, you still own the stock. Edit: As CPLX points out below, in reference to a derivative market, the point is much more valid.
- CPLX 11y agoMy assumption was that he was talking about derivatives and synthetic securities (i.e. "non-collateralized" as he said). If that's the case his analogy is actually quite reasonable.
- deleted 11y ago[deleted]
- vonklaus 11y agoI am talking up structured financial instruments like that. Obviously, DraftKings doesn't map perfectly to etfs and options, but i think the analogy stands. To be clear, I think that skill based wagers should be allowed. I was begging the question, is there a difference here, and it is: It is a lot better known how the outcome of a football match will be determined than other fin. products. Football is pretty discrete and doesn't have a broad impact on soccer outcomes (unless you are not American the soccer === football) This is discretionary capital and not investment money. So, my sarcastic point was: thanks for protecting me from having fun with $20 i earned weekly, don't you have anything else you might want to look into?
- csense 11y agoBetting on sports teams takes some statistical knowledge and modeling -- there's some skill involved. Betting on random numbers takes no knowledge -- there's no skill involved. If the former is illegal and the latter is not just legal, but a business actually run by the state -- isn't this hypocritical?
- dragonwriter 11y ago> If the former is illegal and the latter is not just legal, but a business actually run by the state -- isn't this hypocritical? Both are generally illegal in most states in the US. That some states operate one while generally prohibiting it is not particularly odd; states often reserve the right to do things themselves that are generally prohibited.
- kartan 11y agoGambling is usually a business run by states as it is like an extra voluntary tax. Usually the returns are lower than in private run lotteries to make it less appealing, so the final result is that it is heavily taxed. Also there are laws that limit how much advertisements you can do. Banning gambling doesn't looks like it works, people continues gambling in worst conditions. Letting the state control it allows for more control and it is less profit oriented as social issues are taken into account. I find it a really good solution to the problems that gambling has. And it allows people that does responsible gambling for fun to do it.
- icebraining 11y agoLetting the state control it allows for more control and it is less profit oriented as social issues are taken into account. In which ways do State-run lotteries take social issues differently than privately run ones? I'm not talking about the application of the lottery tax, as private lotteries could be taxes as well.
- douche 11y agoI see more advertisements for state-run scratch tickets, Meggabucks, and Powerball than I do for any other single organization's products. Worst, this crap caters and appeals exactly to the clientele that can least afford to light $10-$20 on fire as a habit.
- nugget 11y agoThe fall of DFS (if it occurs) will have serious ripple effects. I know DraftKings alone was spending at least $3 million/day (maybe more) on advertising at their peak last summer, which would make them one of the largest digital advertisers in the world. Presumably FanDuel was similar.
- ryanhuff 11y agoThe biggest ripple for me will be avoiding their brand all over MLB games come Spring. The product placement was annoying last year.
- beedogs 11y agoAnnoying and hypocritical. This is the same league that's barred Pete Rose from the Hall of Fame, and all their scoreboards last year were sponsored by Draft Kings.
- code777777 11y agoPerhaps they were operating under the mainstream radar for a while and all the advertising was their downfall. According to Wikipedia, Draftkings has been around since 2012. I'd never heard of them until they started plastering every sporting event I watched with annoying, loud commercial after commercial.
- brighton36 11y agoMight be a nice opportunity for Bitcoin here. Let's see if they take that step or prefer to go out of business
- grubles 11y agoSsshhhhhh. One mustn't speaketh of bitcoin 'round these parts, less you get hanged. Nevermind the fact that this is the exact reason something like bitcoin exists.
- kriro 11y agoSome questionable processors will step in. Stuff will get shut down, money will be frozen in accounts. This is online poker all over again. I think DFS has better chances of survival because they have some strong deals with people that know how to move and shake in Washington (NFL says hi). And of course this link (John Oliver) needs to be posted eventually when discussing anything DFS related: https://www.youtube.com/watch?v=Mq785nJ0FXQ https://www.youtube.com/watch?v=Mq785nJ0FXQ
- jonesb6 11y agoGreat piece by John Oliver. I wonder what it feels like to work for those companies.. Lives were surely ruined by this.. how do you sleep with that.
- deleted 11y ago[deleted]
- CPLX 11y agoCan we just legalize gambling and be done with all this nonsense. Though it clearly has some downsides it has to be like the 144,566,786,335th worst thing that's legal and permitted.
- masterleep 11y agoYou are possibly under the misapprehension that adults should generally be allowed to decide things for themselves. This point of view is old fashioned.
- brwnll 11y agoSociety is nothing more than a collection of people who agree/desire to abide by a common set of rules. Typically enumerated and enforced by some type of governing body. If the American people in general want to live in society with only a subset of gambling is allowed (which it appears they do), that's exactly the point of the government.
- masterleep 11y agoIt would be desirable if the government followed the agreed upon rules, I'll agree with you there.
- vonklaus 11y agoAbraham Lincoln had an impossible choice to make, and withoutthe benefit of hindsite I dont know anyone could have made a better one. Unfortunately, Allowing states to decide for themselves whether they could literally own humans or not, lead to a civil war that strategically undermibed states rights. So no, it is a lot harder to just 'have a subset' of something. Plus, obviously the internet is national + global, so while I agree with you I would argue the governments only role in the matter is arbitration in the event of a lawsuit as these are simply contracts. You probably got downvoted because: > if the American people want... Is rarely considered.
- superuser2 11y agoPerhaps if they sign away their claims to the social safety net.
- joaoaparicio 11y ago"Regulatory avoidance isn't a good business model." - Ron Bernstein, CEO of Intrade
- unethical_ban 11y agoRegulation isn't always a good social model. Rulebreakers get things changed. Sometimes that coincides with a great business opportunity, and sometimes it doesn't.
- kolbe 11y ago"lol" -Uber, Amazon, Airbnb, every bank, &c.
- swang 11y agowhat did amazon do that was skirting the rules?
- icebraining 11y agoPaying sales taxes in CA?
- kolbe 11y agoCollecting sales taxes in most states.
- swanson 11y agoA bit surprising after this OTL report came out this week about pro sports league getting more involved with sports betting: http://espn.go.com/espn/otl/story/_/id/14660326/nba-nfl-mlb-nhl-striking-various-business-deals-gambling-related-firms http://espn.go.com/espn/otl/story/_/id/14660326/nba-nfl-mlb-... as well as positive results on New York injunctions. It's interesting to note that Amaya (aka PokerStars) entered the market as the #3 player last year (via acquisition of Victiv) -- but basically withdraw pre-emptively during the recent legal dustups, banning players from all states where DFS is not explicitly legal/regulated. Wonder if their longer-term, slow rollout might end up playing out in their favor? (personally, I think it won't; either FD/DK will outlast the legal threats or the whole thing will explode)
- swang 11y agoOnce the government choked out online poker's resources for paying people it was all but the end for them. I imagine it will be similar for DFS. Assuming they cannot find another processor to take the risk (probably also means high withdraw fees). As for them replacing $ with bitcoin. You think 95% of the people who play DFS even know what bitcoin is or will go through with the trouble? People tried that with online poker, and while I can't tell you how many of those sites are left, they weren't a good alternative..
- listic 11y agoWhat are Daily Fantasy Sports Clients?