Fantasy Sports Trade Association Forms Self-Regulatory Agency for DFS
Posted on: October 30, 2015, 03:27h.
Last updated on: October 30, 2015, 03:27h.
The Fantasy Sports Trade Association (FSTA) is being proactive in its public defense of the contests its members offer to residents across the United States.
With mounting scrutiny from state regulators, attorneys, and even the Department of Justice, daily fantasy operators are trying to troubleshoot the industry and regain favorability among lawmakers and the media.
That includes DraftKings and FanDuel, the two platforms that control over 90 percent of the market.
Both networks have taken steps to paint their contests in a positive light, DraftKings moving away from the World Series of Poker and FanDuel launching an online petition for players to sign in support of daily fantasy sports (DFS).
Forming the Fantasy Sports Control Agency (FSCA), the FSTA says the independent agency will be charged with “creating a strict, transparent and effective system of self-regulation for the businesses that comprise the fantasy sports industry.”
At the core of the DFS debate is the fact no regulation currently exists in regards to not only the contests on collegiate and professional sports, but also the operational structure and climate at daily fantasy companies.
Nevada has already forced daily fantasy operators out of the state until the companies apply for and receive online gambling licenses.
Of course, that goes against the FSTA’s belief that daily fantasy contests are skill and not gambling.
The fact of the matter is, the majority of DFS outsiders are leaning towards the contests being associated with gambling over skill, similarly to poker’s classification.
Former Florida Governor Jeb Bush linked DFS to day trading on Wall Street during the Republican 2016 primary debate this week, adding “there has to be some regulation.”
The question then becomes whether that regulation should be dictated by Congress, individual states, or the DFS industry itself. The FSTA is campaigning for the latter.
Labor of Love
To add enthusiasm for its newly formed self-regulatory control, the FSTA has appointed former US Secretary of Labor Seth Harris to chair the FSCA.
“The issues and opportunities facing the fantasy sports industry can be best addressed through an independent agency supported by the industry and its members,” Harris said. “We can save lawmakers and regulators the cost and effort of intervening so that they can expend their limited resources on bigger and more societally important challenges.”
According to a press release, the FSCA will consist of four principal elements, “Standards,” “Company Controls, Processes, and Leadership,” “Auditing Policies and Procedures,” and “Enforcement.”
Each section will come with specific regulations that DFS operators must comply.
DraftKings and FanDuel, both members of the FSTA, delighted in the formation of the agency headed by Harris.
“We are committed to working with the Fantasy Sports Control Agency,” DraftKings CEO Jason Robins said in a statement. “At DraftKings, we recognize our responsibility to the millions of fans who are captivated by the excitement and interactive nature of daily fantasy sports.”
Perhaps most notably omitted from the FSCA announcement is any reference to how DFS operators will be regulated as it relates to taxes.
With the industry now valued at $1.5 billion, that is likely one of the foremost reasons daily fantasy has captured the interest of politicians.
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