While the DFS industry has taken a lot of heat since FanDuel and DraftKings clogged the airwaves with their NFL ad blitzes last year, billionaire investor Mark Cuban believes that the media is now overlooking the fact that several states are considering passing legislation to make the industry explicitly legal.
Cuban, who is an outspoken proponent of daily fantasy, wrote an op-ed in USA Today titled Good luck killing fantasy sports, in which he laid out two reasons he believes that DFS will survive this time of uncertainty.
First, he says that daily fantasy creates “exponential value” for the sports, entertainment and tech industries. Indeed, DFS users are known to consume much more sports media when actively drafting and sweating their teams than they would otherwise. Apart from giving players added enjoyment, advertisers, teams and networks all benefit from the increased engagement. “They are complementary to just about every entertainment product I enjoy and that we, as Americans, collectively love,” he said.
Cuban also believes that the DFS industry spurs technological innovation, as fans have begun making a living working in the game they love. “We are witnessing the next generation of entrepreneurs building small businesses across the country, creating jobs and new technologies, while adding value to the sports and entertainment industries. This innovation should be preserved and protected.”
Drafting DFS versus real teams
Second, he makes the case that fantasy sports is a game of skill, comparing DFS to his job as owner of the NBA’s Dallas Mavericks. “Donnie Nelson and my team manage the Mavericks in the same way that most sophisticated people play daily fantasy sports — they collect the data, analyze it and make predictions about what it means,” he said. “We succeed in the same way fantasy players succeed on daily fantasy sports sites — by making accurate predictions.”
Attorneys general in several states, however, disagree and have given their opinion that the game is gambling and should be made illegal. For the naysayers, Cuban had some harsh words. “Yes, certain politicians such as New York Attorney General Eric Schneiderman and California Assemblyman Marc Levine have sought to make a name for themselves by promoting efforts to ban daily fantasy in their respective states. They are wrong and misguided,” he said.
But while some reject the industry as gambling, lawmakers from over 20 states have introduced DFS legislation which would provide the game a path to legalization. The California state assembly, for example, nearly unanimously passed a daily fantasy measure in near record speed recently.
Cuban has invested in several DFS and eSports startups, and remains confident of his holdings. In the DFS space, he has thrown his money behind sports analytics firms Sportradar and Fantasy Labs, companies which provide the stats which provide the backbone of the industry.
While analysts have downgraded the value of industry leaders DraftKings and FanDuel, Cuban isn’t nervous. In the op-ed, he had a message for the politicians which seek to stamp out the game: “Good luck standing in the way of the entire sports-loving population that enjoys the camaraderie that comes with playing fantasy sports. Good luck telling these folks that they are criminals for doing something that is its own American national pastime. And good luck telling us that we are incapable of deciding for ourselves what hobbies we can participate in.”