Last week saw the long delayed launch of DraftKings in the UK, and whilst this opens up a potentially lucrative new revenue stream it may create more problems for the company and other DFS operators on home turf in the USA.
The argument has been raging for some time now, are the likes of FanDuel and DraftKings truly games of skill or, as many state prosecutors are arguing successfully, does the element of chance mean daily fantasy sports constitutes gambling?
The laws vary from state to state, and at the time of writing DFS is currently deemed illegal in ten states whilst this topic is being debated in plenty more.
Hawaii ruled recently that DFS constitutes gambling which led to Honolulu Prosecuting Attorney Keith Kaneshiro issuing a cease and desist letter to such operators to stop accepting bets from Honolulu residents. DraftKings Prosecutor David Boies announced that the company would oblige, but that he did not agree with the outcome of the ruling.
In order to launch in the UK DraftKings had to secure a gambling licence, and FanDuel is expected to follow suit in the near future, but this opens up a can of worms for the companies in that on one front they’re arguing their products aren’t gambling whilst on another they’re securing gambling licences.
Gambling laws in the UK are different to those in the USA but it is surely something which state prosecutors will take notice of. The Nevada Gaming Control Board last year noted that DraftKings’ application for the UK licence showed “an appearance of inconsistency.”
Daniel Wallach, Sports and Gaming Attorney at Becker & Poliakoff, stated: “It undercuts the DFS operators’ contention that they’re offering purely an entertainment product and not a gambling product.”
Whilst the legal battles continue state to state in the US, DraftKings will be pushing its UK product as a means of developing a reliable source of revenue which won’t be disrupted by government intervention.
Marc Edelman, an Associate Professor of Law at Baruch College who consults on fantasy sports law, said: “Operating in England, or in any countries around the world where gambling is legal with a license, is probably safer for revenues.”