Frontline DFS Episode: 3 Key Takeaways

On Tuesday evening, while many were glued to their television watching the results pour in from the New Hampshire primary, PBS’s FRONTLINE, with the help of the New York Times, aired an hour-long episode delving into the world of online sports betting and daily fantasy sports.

The FRONTLINE episode delves into numerous aspects of fantasy sports, from its humble beginnings as season-long leagues amongst friends, to the current explosion of daily fantasy sports apps.

Defending DFS’s positions is an unenviable position

My assumption is the DFS industry won’t like how the FRONTLINE episode turned out, but a large part of that is their own doing. Every industry defender, to a fault, refuses to so much as entertain the notion that DFS contests could be gambling. This refusal reeks of disingenuousness on the industry’s part and often makes them look like an ostrich burying their head in the sand.

As Chris Grove noted:

For those who assert that DFS isn't gambling: instructive to note that players reflexively use lexicon of gambling to describe what they do

— Chris Grove (@OPReport) February 10, 2016

When you use words like wager and say things like the money makes it fun, you’re not going to be able to square your “it’s not gambling” circle in the eyes of the general public.

Furthermore, the sums of money being wagered, and the swings, certainly line up with how people view gambling. For instance, the episode begins with DFS player Bryce Mauro, telling FRONTLINE how he learned about DFS while in high school, and how he enters up to 500 contests per day (Mauro then explains how he “wagered” about $12,000 on the day’s slate of games after losing $10,000 the night before). Mauro claims to have made hundreds of thousands over the past two years playing DFS.

On the day he spoke with frontline, Mauro pocketed $11,000 in profit from his $12,000 wagers and then lost $6,000 that evening.

It’s hard to hammer home the skill game argument when a top player is having five-figure swings on a daily basis. When most people think of a skill game, they conjure up mental images of a chess player who is clearly better than his opponent, or Michael Jordan playing Steve Kerr in a game of one-on-one.

FanDuel CFO Matt King claims, “every time you talk to one of our users what comes through loud and clear is we’re an entertainment product.” But poll after poll shows this is an extreme exaggeration, at least among the general public. Anecdotally, a significant (but likely minority) number of DFS Players I interact with harbor a similar feeling, DFS is gambling, but should be legal.

Every time someone says “it’s not gambling” you feel the proverbial nod, nod wink, wink

Several exchanges made this abundantly clear:

BRYCE MAURO, DePauw University: I wagered about $12,000 this morning.

WALT BOGDANICH, The New York Times: That’s a lot of money.

BRYCE MAURO: Yes, it is.

or:

WALT BOGDANICH: Is what you do gambling?

BRYCE MAURO: No, it’s not gambling at all. I mean, it’s — I consider it more of investing. You know, I have a portfolio. I’m trying to diversify the portfolio by picking players every day. I’m trying to maximize returns. I’m trying to optimize my lineup each day.

When Bogdanich pressed Mauro, asking him about FanDuel contacting him and requested he refrain from using the word gambling, Mauro answered, “I’d prefer not to answer that.” Mauro went on to say, “I don’t want to do anything to upset the industry. It’s my job pretty much.”

or this exchange with FanDuel CFO Matt King:

WALT BOGDANICH, The New York Times: I would wager right now that if you and I went out onto the street and asked the first 10 people we ran into “is fantasy sports gambling?”, I would bet the majority would say yes.

FanDuel CFO Matt King: I can’t hypothesize about that.

WALT BOGDANICH, The New York Times: Do you want to go down with me and look?

FanDuel CFO Matt King: That’s OK.

Problem gambling is the industry’s 800 pound gorilla

During the episode, gaming attorney Daniel Wallach called problem gambling the Achilles Heel of the industry. And I believe he is right.

Several of the DFS players interviewed by FRONTLINE clearly showed symptoms of problem gambling, and saying because your product isn’t gambling (in your opinion), so it cannot create problem gamblers, is going to rankle lawmakers, when they see an exchange like this:

WALT BOGDANICH, The New York Times: Are you aware of any young people who have developed gambling problems by playing fantasy sports?

FanDuel CFO Matt King: No.

WALT BOGDANICH, The New York Times: None?

FanDuel CFO Matt King: No.

For FanDuel CFO to dismiss out of hand the potential that people could develop gambling problems from playing DFS is going to hurt them in the long-run. Instead of getting out in front of these issues they simply refuse to believe they exist.

As Keith Whyte of the National Council on Problem Gambling stated in the FRONTLINE episode, the industry has taken blows they could have avoided by adopting strict consumer protections like you see at licensed online betting sites. According to Whyte, he’s been in contact with the industry for three years about implementing strong consumer protections.