Dem rips daily fantasy sports operators during hearing

Lawmakers at a House hearing on Wednesday said they saw no difference between daily fantasy sports and gambling.

Rep. Frank Pallone Jr. (N.J.), the ranking Democrat on the House Energy and Commerce Committee, said it is hypocritical for FanDuel and DraftKings to argue that daily fantasy sports is not gambling when they apply for gambling licenses in the United Kingdom to conduct business. 

{mosads}“Yet in the U.S., both companies maintain that daily fantasy sports is not gambling,” Pallone told Peter Schoenke, the witness representing the Fantasy Sports Trade Association. “So what is DraftKings’s rationale for getting a gambling license in the U.K. if they say that daily fantasy sports is not gambling? And what about FanDuel’s? How do they justify this when they ask for the gambling license in the U.K.?”

Schoenke responded that the laws governing gambling were different in the United Kingdom and were more restrictive.

“It sounds like the difference is that in one country they have a lot of smart lawyers or lobbyists that are defining things in one way and in the other they’re not,” Pallone shot back after one exchange with Schoenke.

Pallone, who asked for Wednesday’s hearing, has long contended that the websites facilitate illegal gambling. He takes issue with the fact that sports betting is almost entirely illegal outside Nevada, but that daily fantasy sports may operate.

He later raised questions about allegations from last year that an employee at DraftKings had used proprietary data to win money on FanDuel. That controversy resulted in policy changes at the companies.

He also mentioned his concerns about the way that professional sports leagues have sued to stop legalized sports gambling in his home state while tacitly or explicitly supporting the daily fantasy sports websites.

Though Pallone was by far the most critical member of the panel, others expressed their own concerns.

“Even if some skill is required, daily fantasy still at its core involves betting on sports,” said Rep. Jan Schakowsky (D-Ill.).

Others, including subcommittee chairman Rep. Michael Burgess (R-Texas), expressed concerns about consumer protections. Burgess was especially concerned about the possibility that young people could use the websites, saying that the “underage person should not be allowed to play.”

The websites became particularly controversial last fall after running a barrage of advertisements for their services. Since then, however, the debate has taken on a more measured tone — one that was reflected in the many informational questions lawmakers asked at Wednesday’s hearing.

The companies argue that they should not be treated as gambling because their games rely more on skill than on chance. In some states, lawmakers have legalized and regulated the games. Other states have said it constitutes illegal gambling, leading, in some cases, to DraftKings and FanDuel blocking players in those markets.