Fantasy sports services are realizing that the US is no longer a friendly market. While CBS has withdrawn its services, Yahoo continues to operate.
As for little-known daily fantasy sports (DFS) services, they have realized that it is better to quit. Meanwhile, major fantasy sports websites DraftKings and FanDuel are engaged in a legal battle in New York.
Operators of fantasy sports services are now devising a wide range of methods to remain in operation despite the intense scrutiny the industry faces. Chris Grove, the editor of Legal Sports Report, says:
The industry is pretty fragmented on the ‘should they stay or should they go’ issue. A real schism has opened up.
According to SuperLobby CEO David Copeland, although several companies are retreating, their move hasn’t had a significant impact on the market. SuperLobby is a UK-based website that tracks operators of daily fantasy sports sites.
However, DraftKings, which is based in Boston, and FanDuel.com, which is based in New York, are determined to continue operating in the US market. Both sites serve a huge community of daily fantasy players and give away enormous prize pools.
Yahoo, the California-based tech company, does not offer daily fantasy sports services to the residents of Iowa, Arizona, Washington, Nevada, Louisiana, and Montana. Fantasy sports are illegal in these states. Yahoo also doesn’t operate in Florida, where a court is trying to decide if fantasy sports violate the laws or not. Unlike Yahoo, companies such as DraftKings and FanDuel.com continue to operate in Florida.
Interestingly, Yahoo continues to operate in New York in spite of the fact that Eric Schneiderman, the New York attorney general, has issued a subpoena demanding more information regarding the operation of daily fantasy sites. Schneiderman has not ordered Yahoo to stop operating although he has ordered FanDuel.com and DraftKings to do so. The battle is now being fought in court between the attorney general and the two fantasy sports
sites.
On the other hand, CBS Sports, which offers season-long, traditional fantasy games, is behaving in a conservative manner. The company has refused to comment, but has released daily fantasy games under a new brand halfway through the Major League Baseball (MLB) season. However, it did not continue to offer the games during the National Football League (NFL) season.
The Amaya-owned StarsDraft has withdrawn from most US states except New Jersey, Kansas, and Maryland. Eric Hollreiser, the vice president (communications) of Amaya, said that Amaya is “taking the long view.” He said:
We aren’t ceding anything to competitors. We’re running a marathon and won’t compete in the expensive marketing sprint the others are running.
Smaller daily fantasy sites are reacting in different ways. Mondogoal, a UK daily fantasy soccer site, has withdrawn from seven US states. Shergul Arshad, the founder of Mondogoal, who resides in Massachusetts, says that he is planning to withdraw completely from the US. He can afford to do so as 90% of Mondogoal’s players do not live in the US.
Seth Young, the chief operating officer of Star Fantasy Leagues, has announced that the company no longer operates in 25 US states because of unfriendly US laws.
