Thursday, December 3, 2015

Controversial fantasy league sites are considered legal despite being gambling sites

Source: http://bit.ly/1N5GW9x
The fantasy sites FanDuel and DraftKings have found a loophole in the online gambling industry, allowing them to legally allow users to gamble through their daily fantasy sports. Online sports gambling is not legal if you are betting on an entire team, as determined by a 2006 bill, but since these sites do not bet on an entire team, it makes the process completely legal.

FanDuel and DraftKings are a week by week fantasy league, allowing players to choose new players every week and make bets based on their new teams. 

Other non-gambling fantasy sites have a specific formula that differs from gambling sites. Most fantasy leagues are a game by game system, having users in the same league go head to head with another user in their fantasy league. It resembles real sports very similarly, with a full season of games, a wins-losses record, and even playoffs if you win enough games throughout the season.

FanDuel and DraftKings work differently however, as their users choose players for their teams week by week. There is no season long commitment to the players you "draft" as you can pick an entirely new set of players the very next week. Users then put in a certain amount of money for entry to join a "league" of players for that week. As the players in real life make plays, the users gain points for their fantasy team. The top few users with the most fantasy points get paid, while everyone else ends up with nothing.

Daily fantasy sites have shown enormous growth in popularity as they have made deals with major companies while spending large sums of money on advertising
Growth in users at FanDuel 

Over the past few years, these sites have grown exponentially, providing a lot of attention to the daily fantasy sports scene. FanDuel for example was founded in 2009. In 2011, the site only had about 17,000 active users. Over the next three years however, the popularity of the site boomed. By 2014, the site had already gained a million users.

There are also many companies invested in these sites which helped raise its popularity. Almost every single team in the NFL has some sort of sponsorship deal with either FanDuel or DraftKings. The NBA and MLB also invest in the sites along with powerhouse companies Google, NBC and Comcast.

It is hard to avoid the presence of these sites as they are advertised everywhere. The companies have spent over $200 million dollars combined this year simply through airing advertisements. DraftKings even made a contract with ESPN to make it the only daily fantasy sports company to advertise on the channel next year. The amount of revenue made by these sites is huge, making the competition between the sites just as big.

An employee leaked a list detailing which players were most picked, then proceeded to win $350,000 playing on FanDual, stirring up a lot of controversy

As the popularity of the sites grew, so did the controversy surrounding them. One specific incident was the tipping point, as one of the employees at these companies won $350,000 after leaking a list of player usage statistics. 

Many users were not happy with the situation and felt that FanDuel and DraftKings were cheating them of their money. Clearly a site that promotes fair gambling is not very fair if certain users have access to information that provides them with a large advantage over regular users. This brought a lot of questions to the validity of the sites and whether or not users were being scammed of their money.

All this eventually led the FBI to investigate the scandal. The results of the incident led FanDuel and DraftKings to take precaution and prohibit their employees from betting in their own daily fantasy leagues. This led to even more controversy as people began to question why FanDuel and DraftKings would do this if they truly had nothing to hide. By banning their own employees, FanDuel and DraftKings were further supporting the idea that insiders have an unfair advantage over regular users. 

New York and Nevada label the sites as gambling and ban daily fantasy sports, causing other states to consider doing the same

Recently, states such as New York and Nevada have banned the use of these sites by labeling them as gambling sites. Other states have considered doing the same in order to limit the use of the sites in their respective states. They believe some sort of legislation or restrictions should be set in order to keep these sites from abusing it's users. FanDuel and DraftKings have already restricted New Yorkers from gambling on the sites, yet still remain hopeful to give New Yorkers the chance to return to daily fantasy.

Since this ban occurred, both DraftKings and Fanduel have filed separate lawsuits against the New York attorney general. Their main argument for allowing New Yorkers to play is that their sites revolve around skill based play, not chance or luck. They claim that playing daily fantasy requires a certain amount of expertise and ability in order to be successful enough to win. Regardless of what FanDuel and DraftKings claims, the New York attorney general has remained skeptical and stands firm on his decision.

This ban is detrimental to FanDuel and DraftKings since New York has more daily fantasy sports players than any other state. The outcome of this hearing is not yet known as Justice Manuel Mendez is still set to make his decision in the upcoming weeks. 

Gambling alters specific brain circuits similarly to drugs making the process of addiction very similar to that of a drug addict
Source: http://bit.ly/1lHoJrE

Despite FanDuel and DraftKing's discontent with the banning of their sites in New York, it may be a positive change for the people of New York. The odds are never in the favor of the player when it comes to gambling, so it would save many New Yorkers' money, as well as help prevent an addiction to gambling.

Gambling is very addictive and can become a problem if not done carefully. Addiction itself occurs when certain chemicals are released in the brain, causing a person to feel good. As explained by Noah Wolf, a Graduate TA with a BS in Psychology, the brain cuts off receptors for the positive chemicals (dopamine) that are released in order to compensate for the excess of that chemical. This in turn makes the brain more vulnerable and forces it to crave whatever activity or drug that releases dopamine in order to satisfy its needs.


Due to the way in which this process occurs, gambling compares very closely to drugs when it comes to addiction. The gambling itself causes a sort of "high" which gamblers start to enjoy. This dopamine high becomes a way for the person to feel good despite any repercussions the person may face such as losings large sums of money. Over time this becomes the only way the person knows to feel uplifted causing them to become belligerent in their addiction, whether it be drugs or gambling. Essentially, gambling becomes the person's drug.



Consumers should avoid playing DraftKings and FanDuel if they want to maintain their money and avoid the chance of addiction

So are these sites really worth playing on? Though their advertisements preach that they are, the facts are largely stacked against them. Many states do not even want to allow these gambling sites to be used in their respective states. A lot of people are also distrustful of these sites, as they may hold an advantage for certain users resulting in an unfair game.

As iterated by Noah Wolf, these sites could also be directly or even indirectly bad for your health due to the negative effects of addiction. The lack of dopamine and resulting altered state of mind can be detrimental to a person's well-being. Their decision making can be completely skewed as their ability to think rationally diminishes.  By making an attempt to avoid gambling, a person could entirely evade the problematic addiction that often accompanies gambling.



To add to the list of problems, the chances of winning on these fantasy sites are very slim. The less you play, the more you will save. Although there is always a chance you could win, in the long run, you save much more money if you simply do not play.

In the end, it comes down to the person. There are instances of people who are successful playing these daily fantasy sports, but those are one in a million. For the average person, winning while gambling is rare. Though it could happen, the amount of money wasted will be more than you get in return. 

As for the FanDuel/DraftKings controversy, we will simply have to wait to find out in the coming weeks what the end result of the issue will be. If the sites remain legal, we can just hope for users to maintain good judgement while using the sites. If the sites do get shutdown, then at the very least, gambling addicts will be spared from overspending from inside their very own homes.

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