ESPN: Fantasy Sports Opens The Door For Sports Betting

Editors update: ESPN is now actively involved in the sports betting industry after partnering with Penn Entertainment to operate ESPNBet.com

The idea that fantasy sports betting is opening the door for the expansion of traditional sports betting may not be the most shocking news ever, but David Pardum of ESPN published an excellent and very interesting article describing the “collision course” of these two growing industries.

From the article (emphasis mine):

“It’s pretty clear where this is going and what the endgame truly is for the iconic international bookmakers and the U.S. gaming powerhouses that are hustling themselves into position. Their collective eye is on the massive single-game, American point-spread betting pie — if it were to be legalized outside of Nevada.”

The basic takeaway from the article is that fantasy sports are doing more than just getting people more comfortable with the idea of money exchanging hands around sporting events. Fantasy sports are already blurring the lines between “fantasy” and straight-up “sports betting” and they may indeed open the door for regular old betting on the outcomes of individual games, which is currently only legal in Nevada.

One-day fantasy sports contests were not what lawmakers had in mind when they granted an exemption for fantasy sports into the Unlawful Internet Gambling Enforcement Act of 2006. Back then, “fantasy sports” were casual, season-long leagues that typically involved groups of friends and co-workers. There were online fantasy leagues at that time too, but even those were casual in nature. Fantasy sports was not a billion dollar, high-growth industry at that time.

But then, FanDuel and DraftKings entered the picture and began offering one-day fantasy sports contests online with massive prize pools all backed by aggressive marketing. Almost overnight, the fantasy sports industry had changed in a major way. These new games hosted by FanDuel and DraftKings were a whole different animal, but they abided by the letter of the law.

There were some growing pains, no doubt. Lawmakers in various states opened investigations into the biggest DFS companies. Some states declared daily fantasy to be illegal gambling. But, the fantasy sports industry stuck it out, hired lobbyists, got involved in the lawmaking process, formed relationships with professional sports teams and managed to integrate themselves into the sports landscape.

When you stop and think about it, it is amazing how quickly everything happened.

Back to the article:

“A cashier’s cage is being built inside the iGaming lounge at Resorts Casino, the nation’s oldest legal casino outside of Nevada. New video screens for showing live and virtual sports are on the way as well. By the time everything is approved and up and running, sports fans will be able to walk up to a counter, hand a ticket-writer as much as $10,000 and make three predictions on a Sunday slate of games.”

In other words, casinos outside of Nevada are basically building sports betting lounges but offering fantasy sports to stay within the letter of the law. We can see how the lines are already blurring. Now, add some of the newer types of fantasy games being offered in these lounges and you start to inch closer and closer to that afore-mentioned end game.

While the calls for the legalization of sports betting are growing in number, casinos and DFS operators are not content to wait around for new legislation. Not only are they pushing the bounds right now, but they are positioning themselves for the day that sports betting is legalized outside of Nevada. If you go read the full article, you can see how some of these companies are doing it right now while still complying with federal gaming laws.

One they mention is USFantasy, which we’ve covered briefly before. USFantasy isn’t even offered online; they’ve made a business model looking to take advantage of exactly what the iGaming lounge at Resorts Casino is trying to do. The games at USFantasy involve betting on which players will accumulate the most fantasy points in a day of games. Payouts are determined by the amount of wagers taken in, à la parimutuel horse racing.

The full ESPN article details several other fantasy games that will be going live soon. Some of these blur the line between fantasy sports and regular sports betting even more than USFantasy. The article is a long read, but it is well worth it if you’re curious about how the near-future of fantasy sports is shaping up.

Related:

• State And Tribal Interests Preparing For Legal Sports Betting
• The Movement For Legalized Sports Betting: Picking Up Steam In 2016