Bennie would be shocked and amazed, and more than a bit furious. He had to dodge and weave the cops to run numbers, knowing that eventually he would get pinched. And today, you can’t watch a football game without competing commercials for a minor variation on a theme. FanDuel or DraftKings?
How is this possible? And how did a fun water cooler pastime turn into a multibillion dollar industry overnight? It’s the same lie that allows a stock market to exist. Fantasy football isn’t a game of chance, but a game of skill. You buy that, right?
The key to the industry’s growth is a loophole. Considered a game of “skill” versus “chance,” daily fantasy sports is exempt from the 2006 Unlawful Internet Gambling Enforcement Act, which prohibited payments to online gambling sites. As a result, the industry is essentially unregulated, left to monitor itself.
Combine something guys love, football, with the dream of snagging a couple mil for some skillful guessing (and there are a lot of guys who believe their mad football knowledge is, indeed, skillful), and what’s not to love?
Evidently, it’s not doing a very good job. Last week Ethan Haskell, a DraftKings employee, published proprietary information about the percentages of DraftKings participants who “owned” different N.F.L. players used in lineups on the site’s biggest daily fantasy football contest. It was a seemingly accidental goof that might have passed unnoticed — had Mr. Haskell not used this potentially large strategic advantage to win $350,000 in a similar contest on FanDuel.
Somebody was smart enough to realize that Big Data approaches gave them an advantage over skillful guesswork. And as soon as others found that someone on the inside was smarter than they were, they all went nuts.
Cries of “insider trading!” instantly rang out. The F.B.I., the New York attorney general and the Department of Justice began investigations. Class-action suits have been filed; Harry Reid, the Senate minority leader from Nevada, has called for federal oversight.
As soon as someone felt cheated by being outsmarted, the analogy to the stock market became clear. The author of the Times’ op-ed, Mark St. Amant, calls out the silliness.
It’s tempting to join the pitchfork brigade. These companies have spent over $100 million on advertising to get more people to sign up, even as their employees were using proprietary information to cheat (both companies have since barred employees from participating in daily fantasy sports).
But the truth is, I don’t care. And I doubt most players do, either.
How is it possible that people who put money into the game of
chance skill are foaming at the mouth?
Despite the legal fiction that daily fantasy sports is about “skill,” any rational person should know that it’s gambling, and any rational person is going to be in it for fun, not profit. Tsk-tsking a lack of transparency in an unregulated, billion-dollar industry is like going to a gentlemen’s club and being outraged that the dancers’ breasts are fake.
The naiveté with which people approach gambling, whether with fantasy sports or corporate earnings projections, is an outgrowth of our immature expectation of fairness and equality. There is no level playing field. There never was, even if it’s wrapped in rhetoric designed to persuade us otherwise.
While St. Amant may be comfortable approaching fantasy sports betting as a fun pastime, rather than a profit making venture, others are not. Nor did anyone make him the spokesman for what motivates other people to put money on the line to compete over whose mad skillz will win on any given Sunday.
As reflected in the comments to his op-ed, St. Amant is taken to task for two reasons, the first being that others don’t share his laissez faire attitude toward insiders having better odds than he does, and the second being that even if it is just a fun game, cheating is still an inherent evil that shouldn’t be tolerated.
Of course, casinos, whether in Sin City or elsewhere, have always kept the odds in their favor, which is why they can survive. If they pay out more than they take in, there is no money left to have sexy waitresses ply gamblers with free drinks to keep them throwing chips down on losing hands. Everyone knows this, and yet they still come to play.
And players hand over their life savings to large corporations on the belief that they care deeply about their having enough money to survive retirement in style, expecting them to play the game with far greater knowledge and sophistication than they could accomplish on their own. Except these corporations have more traditional names, like Goldman Sachs and Fidelity. They want to have the inside cheaters working for them instead of against them.
Whether St. Amant is right that the patrons of fantasy sports betting are in it for the fun, for the thrill, and don’t care enough about being outmaneuvered by others to grab their pitchforks and storm the digital castle is unclear.
Yes, I’d rather not have to beat DraftKings or FanDuel employees who might have access to confidential data. But even if the Ethan Haskells of the industry are all barred from the game, I’m still unlikely to beat the “sharks,” the hard-core players who have flowed into the game with sophisticated software to analyze lineups and make last-minute switches — and who are the real big-money winners, without a bit of insider information.
There are always “sharks,” people who will try harder, work smarter, try to game the system whether from the inside or out, by big data or Ouija boards, and even they aren’t guaranteed a win for their efforts. Because it’s all gambling, except for the house that takes a piece out of every player whether they win or lose.
We can pretend to regulate it all we want, to give us that sense of comfort that we’re all playing on a level field, but we aren’t and never will be. Once we accept that it’s all a game of chance, and stop trying to micromanage it as if one more tweak will make it fair, we can enjoy the game and take the hit with equanimity.