By Brad Hubbard | @bradhubbard
Well it was another tough round for the daily fantasy sports sites (DFS). Today the New York attorney general filed a cease-and-desist order against the DFS which would not allow New Yorkers to, essentially, place bets with the companies FanDuel and DraftKings. It’s the continuation of a fight that everyone knew was coming but it’s not the end of the companies by any means.
This is the latest move in regulating the industry. Sometime this month the industry will face a Congressional hearing (for what that’s worth) and it is becoming clear that the industry should run, not walk, towards regulation if they want to survive and thrive.
New York may be the largest state to halt the operation of daily fantasy sports sites but it was not the first. The state of Nevada suspended daily fantasy sports sites from operating in the state. As the Gaming Control Board stated that the companies, FanDuel and DraftKings, constituted sports wagering.
We knew this fight was coming sooner rather than later. We also believe that the daily fantasy sports industry will pave the way towards legalization of sports gambling nationwide. We know this because of the big money and sports leagues backing the daily fantasy sports site. At some point this becomes a question of economics and we feel this will win out over the morals argument.
As we stated earlier, the best route for the DFS sites is to run towards regulation. Much like the UFC back in the early 2000’s. Even if they have to go state by state, it’s still better than the alternative which is going out of business or overseas.
Daily fantasy sports sites will survive. There is too much money involved for it to go away. Like we said in an earlier post, business finds away to find the smallest loophole and drive a truck through it. That will happen, even if the truck ran out of gas along the way.