Published: November 13, 2015
In the last decade, fantasy sports have entered the spotlight and have been garnering lots of support among people throughout the country. The interest has skyrocketed in the past few years when companies realized how much money they could make if they were to simplify the process.
Originally, fantasy football consisted of a group of individuals putting money into a pot and then drafting players throughout the NFL to their teams. Each week when players compete, they earn points for the individuals based on how they perform. These scores are added up and a winner is decided. The individuals compete in a season long schedule. The best two or three individuals of the season win the money from the pot.
Since fantasy football came into the spotlight, other sports have been quick to follow. These include fantasy soccer, baseball, hockey, basketball and golf. However none have been as popular as fantasy football.
In 2009, a company named Fan Duel entered the fantasy sports industry. and started a new revolution. The company wanted to make the process as simple and easy as possible. They decided that this would be accomplished by cutting down the length from a full season to a week. Then they decided that they would use a much easier system that allowed for multiple people to draft the same players. Fan Duel did this by putting a value on every player based on his or her skill and strength of schedule. Each individual who enters the contest pays a fee and is given a salary cap. Then the participants draft a team of players while staying below the salary cap. If they score high enough with their team, they will win cash depending on what place they get overall. In 2012, Fan Duel met its biggest competition in DraftKings. The two sites quickly set up a monopoly on the one-day fantasy sports industry as they expanded to other sports. The two now have contests in most every major sport including collegiate athletics.
The industry has faced a new problem this year. As the number of people betting has increased, the amount of money the company was turning over each week has also increased. As this number has risen it has drawn more attention to the industry. Now the federal government has this industry targeted as an illegal gambling group. It believes that because the industry emphasizes the ease of having to worry about just one day, it is more of a gambling event than a seasonal sport. The government is trying hard to regulate the industry including mandatory audits by third party companies. It also wants more strictfinancial regulations and accounting practices. The industry has not fought most of these requirements and has even embraced the ideas of audits, finance and accounting practices. However, they feel as though they are being lobbied against by other institutions which hope to see this industry fail.
This week New York’s Attorney General, Eric Schniederman, ordered both companies to shut down all activities in the state through a cease and desist. This has already started to spark confrontations between both the government and its citizens. DraftKings responded immediately by sending out a message to all players in the affected area telling them about the news and saying that they should contact the attorney general.
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