Are Daily Fantasy Sports Gambling? DraftKings CEO Compares DFS To Chess, Picking Stocks, Emphasizing Skill

The CEO of DraftKings, one of the major daily fantasy sports services, addressed the question nagging a growing pastime for sports fans: is it gambling? Jason Robins, speaking Tuesday on a panel at the Global Gaming Expo in Las Vegas, emphasized that daily fantasy sports are skill-based games, comparable to playing chess or picking stocks, reported the Las Vegas Review-Journal.

The CEO stated that players on DraftKings, typically men ages 21 to 35, are analytically minded. "They do their homework," Robins said, according to the Review-Journal. "It's like the stock market. They enjoy looking at something and trying to figure out something that someone else doesn't see."

The panel was focused on whether or not fantasy sports should be considered gambling. Daily fantasy sports allow users to compete for real money in competitions that can take just hours to complete. The Unlawful Internet Gaming Enforcement Act passed by Congress in 2006 forbids gambling businesses to accept wagers online. But the law also had a section that expressed fantasy sports were allowed as long as the prize was not determined by the number of participants, the outcome reflected the skill of the player and the contest was not determined by the performance of a single team or individual athlete.

When the law was written, fantasy sports followed a season-long format, either run through a service or by a group of friends that formed a league. Daily fantasy sports would not exist for three more years.

As daily fantasy sports have exploded onto the national scene, the debate surrounding if it constitutes gambling has grown. Nevada, California and Massachusetts have set out to review the legality of daily fantasy. Robins, however, pointed out in the panel that under 15 percent of his users have placed a sports wager with a Nevada sportsbook or an off-shore sports gambling site.

Professional sports leagues have been quick to jump on board with daily fantasy sites, the NFL especially. DraftKings and the NFL Players Association announced a marketing agreement Tuesday that will allow star players to appear in advertisements. Twenty-eight of 32 NFL teams have some form of partnership with DraftKings or FanDuel, the other major daily fantasy site.

The NCAA, meanwhile, has pushed against daily fantasy, even threatening to discipline athletes who participate, since money is on the line. "Fantasy sports leagues threaten both the integrity of the game and the well-being of student-athletes,” Mark Strothkamp , the NCAA’s associate director of enforcement, told ESPN.

Robins further lauded safeguards employed by DraftKings, including games that are created for users with different skill levels and the ability for one player to block another from competing in the same contest.

Both DraftKings and FanDuel, during a time of stunning growth, have advertised frequently during the first three weeks of the NFL season. The two companies spent a combined $32 million on ads in the first week alone, according to iSpot.tv. DraftKings and FanDuel are each valued at more than $1 billion, and Eilers Research gaming analyst Adam Krejcik projected that daily fantasy sports entry fees will hit $3.7 billion this year and $17.7 billion in 2020, via the Review-Journal.