The unregulated world of daily fantasy sports has come under fire this week, with accusations of corruption and insider trading that could bring a billion-dollar industry to its knees.
Buffalo News sportswriter Tim Graham wrote a story about this very topic just days before the curtain was pulled back on sites like FanDuel and DraftKings.
“The hypocrisy that goes on with the daily fantasy sports and the league and the broadcast networks was . . . rewarding to work on,” Graham said on CBS Sports Radio’s Ferrall on the Bench. “I’m glad my story ran when it did. It ran in Sunday’s paper, and 24 or 48 hours later, these mini-scandals are erupting and could be bad news for daily fantasy leagues.”
Graham spoke with disgraced former NBA referee Tim Donaghy for his story.
“I knew his name just carries a certain gravitas to it. it resonates,” Graham said. “You hear Tim Donaghy, you automatically think gambling. I asked him what he thought of daily fantasy sports, and his quote was something along the lines of, ‘I don’t know who in their right mind would ever think it’s not gambling. It’s absolutely gambling.’ The leagues, all of them – the NFL, NHL, NBA, NCAA, NASCAR – they like to think that they’re not involved with gambling because a federal law, a very quirky law that is not doing what it was intended to do when it was enacted in 2006, is being used for the leagues to say fantasy sports are not gambling. And it doesn’t matter, apparently, how much you spend on it, how much you can win from it, how often you do it, even if it’s hundreds (or) maybe a thousand times a week or a day – however much you want to bet on it. It’s not gambling because the federal government says that (it isn’t). It’s gotten way out of hand, I think, relative to the federal law.”
To be clear, Graham isn’t opposed to sports betting, but he does feel there needs to be more transparency and accessibility.
“I’m a guy who used to live in Vegas,” he said. “I’m all for it. I’m all for daily fantasy. But you know what? I want to be able to play online poker. I want to be able to legally bet on a game on Sunday in which I get 5.5 points. It’s just the hypocrisy that I find fascinating. . . . It’s talking out of both sides of their mouth. That’s what the leagues are doing. In fact, just as recently as (Tuesday) – even with all this daily stuff blowing up in the leagues’ faces and networks like ESPN starting to back out of their different deals that they have in which they integrate daily fantasy stuff into their coverage, to the point where you don’t know if it’s an ad or if this commentator really believes what he’s saying.”
Employees of these daily fantasy sites have reportedly won millions of dollars – which, needless to say, raises red flags.
“Any kind of policies (against employee participation) would be an acknowledgment that they’re not in a normal business,” Graham said. “If you have to do something where you tell your employees you’re not allowed to do it, then that means you have something that involves insider trading – something that probably needs to be regulated. How many companies can you think of or industries in which . . . an employee isn’t allowed to actually use the product and then that industry is not regulated? Maybe there’s something out there that I can’t think of, but it’s like banking and casinos and the financial industry. It’s all kind of things that can be rigged in which you can take advantage of proprietary information for your personal gain. That’s been a problem.”