NBA Commissioner Adam Silver yesterday "called for federal regulation of daily fantasy operators" and said that the league will "continue its partnership with FanDuel despite multiple investigations into industry trade practices and questions over the legality of the contests under federal and state gambling laws," according to Fainaru & Fainaru-Wada of ESPN.com. Silver said that he is "'nervous' about the recent developments but welcomed the growing scrutiny as a path to regulation that will protect fantasy players." Silver: "There should be a regulatory framework; there should be increased transparency for consumers. I think it would ultimately aid the industry. In fact, I think we're seeing the marketplace impacted, because there's not a clear regulatory framework right now." Silver said the NBA is "not considering withdrawing or backing off our relationship with the industry." He added, "It's something that we're monitoring very closely. And it's something that we're deeply engaged in on the broader subject of daily fantasy-slash-sports betting." Asked if he thought daily fantasy is gambling, Silver replied, "I don't, because of the legal definition of daily fantasy vs. what sports betting is. ... Daily fantasy, as it's currently constructed, is clearly a game of skill." Silver then "downplayed the extent of the NBA's financial relationship with FanDuel." A source said that the NBA "acquired a small ownership stake" in FanDuel -- less than 10% -- in "exchange for making FanDuel the league's official daily fantasy partner." FanDuel on its website lists NBA President of Global Operations & Merchandise Sal LaRocca "as a member" of its BOD. But Silver and LaRocca "denied that was the case." LaRocca said that he "attends FanDuel board meetings but does not vote and provides advice only 'if I'm asked an opinion.'" Meanwhile, MLB President of Business & Media Bob Bowman said regulation would be "welcome." Bowman: "It seems like a lead-pipe cinch that regulation is going to be coming." MLB has had a minority equity stake in DraftKings since '13 (ESPN.com, 10/21).
STATE YOUR CASE: In Boston, Callum Borchers notes sponsorships that have helped DraftKings and FanDuel "raise their profiles and lure players could be canceled if states evaluating the legality of fantasy sports cash contests determine they violate gambling laws." Florida is "one of several states where the multibillion-dollar fantasy industry is under scrutiny." The Dolphins in a statement said, "We would need to consider all of our options, including termination, if their business model is deemed to be unlawful." A Jaguars spokesperson said any decision to sever ties “would have to be determined based on a change to the legal status.” Borchers notes 29 of the 32 NFL clubs "have advertising contracts with fantasy sports operators." DraftKings "has deals" with 12, FanDuel has 16 and Yahoo has one. The three teams that "do not have fantasy deals" -- the Seahawks, Saints and Cardinals -- are "based in states where the contests are illegal." NFL VP/Communications Brian McCarthy "stopped short of saying the league would order clubs to void their deals in the event of a legal status change." But he "made the league’s expectation clear." McCarthy: “Teams have to follow local, state laws." Borchers notes beyond the "tens of millions of dollars each has spent on television advertising, DraftKings and FanDuel have used agreements with individual clubs to embed themselves in game action." At Gillette Stadium, AT&T Stadium and Arrowhead Stadium, fans "eat and drink -- and track fantasy stats on big-screen TVs -- in DraftKings-branded sports bars" (BOSTON GLOBE, 10/22).
NOT HORSING AROUND: BLOODHORSE's Jeremy Balan noted the legality of DFS games was "at the forefront of the California Horse Racing Board Pari-Mutuel, ADW, and Simulcast Committee meeting" yesterday at Santa Anita Park. Monarch Content Management President Scott Daruty, whose company is an arm of The Stronach Group that controls simulcasts of 11 racetracks, made a "specific target" of Derby Wars, a horseracing site that "runs contests based on racing results, but does not have to pay host fees." Daruty: "Effectively what they're doing, in my opinion, is stealing our product. They're stealing our product and they're not paying the tracks running the races" (BLOODHORSE.com, 10/21).
