Daily sports betting sites still gambling, despite skill needed

Daily sports betting websites like Draftkings and Fanduel would have you believe that their brand of betting resides in some magnificent grey area — not quite gambling, but more exciting than traditional fantasy sports. This is far from the case.

On Nov. 10, both companies were subject to a cease and desist order by the New York State attorney general, ordering both companies to stop operating in the state because their activities were now considered illegal sports gambling.

While some may be on the fence about whether playing Draftkings and Fanduel is gambling, Garry Smith is not one of them. Smith, research coordinator for the Alberta Gambling Research Institute’s University of Alberta branch, cited that Draftkings and Fanduel users are wagering money on events that are in no way certain.

“The amount of skill involved is very minimal,” Smith said.

Both sites have stated repeatedly that they take skill to win, and say that because of this, they’re not technically gambling. While both Draftkings and Fanduel require some level skill to succeed, it doesn’t mean they’re not gambling.

If you compare Draftkings to single event sports gambling — which is illegal in Canada and all but five states in the U.S. — you start to see the similarities emerge.

Both still have more of a chance element as opposed to more traditional forms of fantasy sport because they’re only played over a single day, or week. Someone can get lucky over the course of a day or week, but they’re much less likely to get lucky over the span of an entire season.

Both Draftkings and Fanduel involve skill, however people who frequent daily sports betting sites aren’t just throwing their money around randomly — at least if they’re serious about actually winning — they’re looking at background information about the teams or players that they’re betting on.

“There’s skill involved in sports betting, but even the professional gamblers find it hard to make money,” Smith said.

For example, if I were to bet on the point spread for a game between the New England Patriots and the Cleveland Browns, I would probably bet that the spread for those two teams would be higher than the normal odds. However, if Tom Brady or Rob Gronkowski were injured, I would alter my bet. Skilled betting requires background research and an acute knowledge of the sport. You have to at least know that the Patriots and very good and the Browns are very bad.

According to an article that appeared Sports Business Journal in July 2015, only the top 1.3 per cent of players won 91 per cent of profits from daily fantasy sports in the first half of this year’s MLB season. That is a huge discrepancy, and one that links Draftkings and Fanduel even closer to gambling. These sites want people to believe that anyone can win, but in reality, their winner demographics are far more similar to gambling.

“The ones that are winning 95 per cent of the prizes are the people that are betting big, using computers and algorithms,” Smith said.

“They’re putting 1,000 teams in there, so the skill involved is having a computer program that finds one that works.”

Right now, Draftkings and Fanduel sit in a strange grey area where they bear many of the same traits as single event sports betting, but aren’t thought of in the same way. Technically, the Unlawful Internet Gambling Enforcement Act protects them from being considered unlicensed gambling, as the act states that games “determined predominantly by accumulated statistical results of sporting events,” to be illegal. Draftkings and other websites of its ilk can hide behind that all they want, but the fact that real money can be won or lost is fairly damning evidence that what happens on these sites is in fact gambling. Even Jim Leach, the man who authored the act, was quoted as saying that it was “sheer chutzpah for a fantasy sports company to cite the law as a basis for existing.” In plainer terms, he think it’s bullshit that these companies are hiding behind this act. Draftkings and Fanduel are private companies running a gambling operation, and that, by definition of the law, is illegal.

“If there is any legal gambling, it’s supposed to be run by the state, these are private companies, so it meets the definition of (illegal gambling),” Smith said.

Sure, winning with Draftkings and Fanduel unquestionably requires skill, but that’s not the point. Gambling and skill aren’t mutually exclusive; it takes skill to win at sports betting.

Draftkings junkies might want to start looking at housing prices in Las Vegas, because that may be one of the only places the site may be allowed to operate in the future.