There’s a classic family photo of my younger sister – she’s three years old with brilliant blue eyes, and is the baby of the family.
Make that, was the baby of the family – the photo shows her crestfallen look as not one but two babies arrive at the front door: yes, twins (now I’m the youngest).
The outpouring of fascination with sports betting at Wednesday’s opening day of the Betting on Sports America trade show at the Meadowlands Exposition Center in Secaucus, NJ reminded me of that photo because just a few years ago, Daily Fantasy Sports was the focus of attention.
DFS a more cerebral game?
“A lot of people have come to me and said, ‘So sports betting is legal now- fantasy is over, right? People played fantasy because they couldn’t [legally] bet,” said Peter Schoenke, president of both Rotowire.com and the Fantasy Sports Gaming Association – having recently swapped “Trade” for “Gaming” in its title.
“But that’s really not true,” Schoenke said. “Fantasy emerged from people who really love stats – not because they couldn’t get ‘action.’ DFS attracts certain people who may not even like sports – but they like math. They like solving problems. They like Rubik’s Cubes.”
“There was the same notion five or six years ago that when daily fantasy took over, that meant the end of season-long,” he added. “People really said that. But actually, look at the big national season-long contests like the National Fantasy Football Championship – they are all killing it.”
In fact, Schoenke said the laser focus on sports betting helps, not hurts, DFS.
“The attention is not on DFS anymore, and we like that,” Schoenke said with a chuckle.
A potential ‘Black Monday’
At the same time, Schoenke said that DFS legalization efforts have helped pave the way for sports betting legalization in many states.
“A lot of the work we did lobbying has paid off where the legislators know us – and it’s some of the same legislators and same issues, like geolocation or “Know Your Customer,'” said Schoenke. “So when the sports betting people came in, everybody knew what to expect.”
The issue of illegal offshore sportsbooks likely benefiting from last year’s U.S. Supreme Court decision that opened the door for states to legalize sports betting also came up. Perversely, market confusion has created a pathway for those operators to try and grab market share in that environment.
Nik Bonaddio, FanDuel’s chief product officer, showed this to be a pet peeve of his.
“There is going to be a Black Monday for offshore books,” Bonaddio said. “It’s going to go down, just like [online] poker did [in 2011]. You cannot operate in a black market like this and not eventually have your day come.”
“And when it does, it’s going to be a black market on everything that all legal operators are trying to do, too,” Bonaddio added. “The guys on my team know that I despise those guys. They make everyone who tries to operate legally – it makes their lives twice as difficult. There’s no basis for them to do it other than making money illegally.”
Bonaddio explained that DFS and sports betting do not have to be in two separate silos. He gave an example of how a DFS player might have a very Patriots-heavy lineup, in which case if that player switched over to the sportsbook on FanDuel, the company could offer a line on the game that invites a hedge play.
Adam Wexler, the CEO of Performance Predictions, noted that any discussions about daily fantasy sports contest inevitably leads everyone to assume that the talk is about salary cap games – when there are other offerings out there. So Wexler floated an idea of DFSC – for “Daily Fantasy Salary Cap.”
Wexler added an amusing story about one of his game offerings that included a picks game for 16 to 20 players in February that included a promotional “free square” of Duke star Zion Williamson and whether he would earn more than one fantasy point that night. Well, Zion committed a turnover in his first possession – and then his shoe famously blew up to result in a score of negative one point.”
We weren’t sure what we were supposed to do when our intent was to give away one free square,” Wexler said. “So we huddled up and decided to award all of those [Williamson results] as a win just like we intended.”
Moderator Dan Back, director of media for Rotogrinders, expressed his gratitude given that he had touted the opportunity for his followers and that he was “getting an earful” until the mercy ruling was applied.
Bonaddio said that the addition of sports betting in various states presents an opportunity for FanDuel to reach out to former customers who may have walked away but might be interested in new money-risking options.
He added that company officials have been “wildly surprised” that their Meadowlands Racetrack sportsbook anecdotally may be drawing “the highest volume of bets of any retail shop in the world.”