The onset of football season in the US this year has been accompanied by a massive advertising push by one-day sports fantasy leagues promising customers immediate fortunes if they win—a marketing blitz that has caught the attention of at least one suspicious lawmaker.
In an interview on Tuesday, Rep. Frank Pallone (D-N.J.) took a swipe at partnerships between sports leagues and teams and companies like FanDuel and DraftKings that have promised to pay out over two billion dollars in winnings this year alone.
Rep. Pallone focused on what he described as the hypocrisy of professional sports organizations that lobby against traditional sports betting, yet do business with corporate fantasy leagues.
“This is gambling, outright, and yet they continue to spend millions of dollars, in a hypocritical sense, to try and stop sports betting through their lawsuits because they claim it’s immoral or it’s going to get the players … involved in organized crime,” Pallone told The Hill.
The ranking member of the House Energy and Commerce Committee, Pallone wrote to the panel’s chairman, Rep. Fred Upton (R-Mich.) calling for a “hearing examining the relationship between professional sports and fantasy sports to review the legal status of fantasy sports and sports betting.”
As the congressman’s letter notes, the National Basketball Association (NBA) and Major League Baseball (MLB) have invested in corporate fantasy leagues, as have Major League Soccer (MLS) and the National Hockey League (NHL). In the National Football League (NFL), 21 teams have inked sponsorship deals with fantasy companies.
Pallone noted that those very same leagues sued his home state of New Jersey to block plans that would have legalized sports wagering. He described the legal strategy as being motivated by cartel behavior.
“Well, the reality is the only reason they’re trying to stop sports betting is because they don’t own it,” he claimed.
While sports betting is regulated under the Unlawful Internet Gambling Act, fantasy sports games are exempted from the law—a carve-out supported by professional sports organizations that believe the leagues generate more interest in professional sports.
Rep. Pallone believes, however, that the loophole was never created to accommodate the high-payout games that are rapidly becoming ubiquitous.
“They’re skirting the law, because the carve-out from online gambling that said you could have fantasy sports was not envisioned to be a multibillion-dollar gambling operation,” the lawmaker said.
The fantasy sports industry, meanwhile, welcomes the Congressional interest in their operations.
“We look forward to having a constructive dialogue with Congressman Pallone,” said Peter Schoenke, the chairman of the Fantasy Sports Trade Association, in a statement to The Hill.
“These are skill-based games that match sports fans against each other in a contest of sports knowledge and strategy,” he added.
DraftKings boasts on its website that it is “based in the USA and is 100% legal.”
Disclosure: I have participated in “daily fantasy leagues” as well as traditional fantasy baseball and fantasy football leagues. I have not been financially enriched by them, in fact, quite the opposite.
