Posts Tagged ‘FanDuel’

DraftKings, FanDuel Settle with Massachusetts AG for $2.6 Million After Deceptive Practices Investigation

 DraftKings, FanDuel Settle with Massachusetts AG for $2.6 Million After Deceptive Practices Investigation

Daily fantasy sports (DFS) leaders DraftKings and FanDuel reached settlements with the Massachusetts Attorney General’s Office last week after AG Maura Healey completed an investigation into the companies’ alleged unfair and deceptive business practices. Each company will pay $ 1.3 million, with the money going to consumer protection and an AG’s Office program to “engage young people in technology.”

The investigation had to do with practices by the companies prior to DFS regulations taking effect on July 1st of last year. The Attorney General’s Office did not specify exactly what the specific business practices were that were in question, instead saying in a press release “that some participants in daily fantasy sports contests were not adequately protected and that comprehensive consumer-protective regulation was needed.”

The investigation likely had a lot to do with the way DraftKings and FanDuel advertised starting with their marketing explosion prior to the 2015 NFL season. Not only were sports fans (and even non-sports fans) inundated with commercial after commercial for the two rivals, but DraftKings and FanDuel were both criticized for making it look like it was easy for lots of people to win money playing daily fantasy sports. As we know, most players are net losers and it is the elite, high volume, deep pocketed professional fantasy players who rake in the lion’s share of the prize money.

The Attorney General may have also been investigating how the sites advertised their deposit bonuses. Those who play poker know how these types of bonuses generally work, but fantasy players who are unfamiliar likely saw things like “we’ll match your deposit up to $ 500!” as some sort of instant money doubler, when in reality, the bonus would be released in tiny increments.

“I am glad to have reached these settlements to address various consumer issues that existed at the early stages of this new industry,” said AG Healey in the press release. “We have since implemented a set of comprehensive regulations that provide consumers with broad-ranging protections and that have served as a model for many other states.”

The AG’s Office said that both DraftKings and FanDuel cooperated with investigators “and have made significant changes to their business models to protect consumers with respect to gameplay fairness, protections for minors, responsible gaming requirements, fairness in advertising, and data and funds security.”

FanDuel reacted to the settlement with the following public statement:

We have worked closely with the Massachusetts Attorney General’s office in their review of fantasy sports, including their issuance of the first set of consumer protection regulations for our industry, which we were pleased to comply with since their inception in 2016. FanDuel has worked tirelessly to pass laws in 16 states that solidify the fantasy sports industry and implement many of these same important consumer protections. FanDuel’s efforts have ensured that sports fans are able to continue playing the games they love in a safe, regulated environment and as we head into this football season, we look forward to continuing these efforts.

DraftKings also issued a statement to the media through its general counsel, Tim Parilla, which essentially echoes that of FanDuel. It reads, in part, “As the Attorney General said, this agreement resolves prior issues that were addressed through new regulations and DraftKings’ implementation of the industry’s most comprehensive compliance and game integrity programs. We are proud of the responsible environment we have created for our consumers and grateful to the Attorney General for working with us throughout this process.”

Featured photo credit: Andrew Dupont via Flickr

The post DraftKings, FanDuel Settle with Massachusetts AG for $ 2.6 Million After Deceptive Practices Investigation appeared first on Poker News Daily.

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DraftKings, FanDuel to Merge

 DraftKings, FanDuel to Merge

We all knew it was coming, but on Friday morning, DraftKings and FanDuel announced that they have agreed to a merger, a deal which will create a company that will have a virtual monopoly on the daily fantasy sports industry.

Per the press release, DraftKings CEO Jason Robbins will be the new company’s Chief Executive and FanDuel CEO Nigel Eccles will be the Chairman of the Board. The Board of Directors will consist of three people from each of DraftKings and FanDuel with one independent director.

No financial terms have been released, but ESPN.com’s David Purdum reported that sources close to negotiations have indicated that the merger will likely be 50/50.

The companies cite “operational efficiencies and cost savings” as benefits of the merger, as well as the ability to allow for a “greater focus on developing new products and features, including more variety in contest formats, loyalty programs, enhanced social functionality and ancillary sports-oriented content and experiences, all aimed at creating a more diverse, exciting and appealing experience for fantasy sports players and all sports fans.”

Of course, the former rivals also see the merger as a vehicle towards quicker profitability, as well.

The press release continued:

The combined company will be able to invest in strategic partnerships across the sports ecosystem. Media, advertising and other partners will benefit from access to more products and customers as a result of DraftKings and FanDuel’s diverse user base and league relationships, as well as increased investment in advertising. Together, the combined entity can accelerate growth of the fantasy sports category, drive broader and deeper fan engagement, and more efficiently reach those players.

One of the major cost savings that people around the industry are looking at is a reduction in combined legal costs. Both companies have been engaged in legal struggles and lobbying efforts on the state level, draining their coffers of funds to the point where it has been reported that they are having trouble paying the bills. Combining forces allows them to eliminate many of these redundant costs.

Interestingly, at least one competitor hopes the merger passes regulatory hurdles. DRAFT founder and CEO Jeremy Levine told ESPN.com that he essentially sees the combined company being able to pave the way for the “little guys.”

“Prior to the tumult of the past year, FanDuel and DraftKings were well on their way to becoming multibillion-dollar pillar business[es] in sports,” he said. “There still will be massive business built in this space, but it won’t be FanDuel or DraftKings individually. Due to the merger, the opportunity is now there for the few companies that were able to survive and strengthen in the past year.”

If the merger gets the ok from regulators – and that’s a big “if,” considering DraftKings and FanDuel own around 90 percent of the daily fantasy sports market – the deal is expected to be completed in the second half of next year. In the meantime, the two sites will continue to operate separately. At this time, it is not known what the name of the new company will be.

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FanDuel, Yahoo Launch DFS Contests in Season-Long Wrappers

 FanDuel, Yahoo Launch DFS Contests in Season Long Wrappers

Following DraftKings’ launch of a new daily/season-long hybrid game, rivals FanDuel and Yahoo! have introduced their own versions of DFS with a season-long flavor. FanDuel’s is called “Friends Mode” while Yahoo’s is the “Yahoo Cup.”

We’ll start with FanDuel’s Friends Mode, as it most closely mirror’s DraftKing’s Leagues. Really, it is just about the same thing, which isn’t surprising since the two largest DFS sites tend to do pretty much everything in lock-step. In fact, there is a good chance that FanDuel would have called it Leagues if DraftKings hadn’t done it first.

In Friends Mode, anyone can create a private league and then invite friends (whether or not those friends are already on FanDuel) to join, similar to how one would get a league together in season-long fantasy. The contests, though, are week-to-week (or day to day, if we’re not talking football, but who are we kidding – we are), just like in regular DFS and are setup by the commissioner of the league. For the most part, that’s it. Friends Mode is basically away for friends to get together and play against each other in fantasy sports without the pressure of remaining diligent about their teams for a full season.

The season-long hybrid part comes into play with a leader board for the league, giving players a chance to see how they are faring against their buddies in the long-term. The daily/weekly contests are where the money comes in; the season-long leader board looks to be just for bragging rights.

Yahoo’s DFS/season-long combo shares some traits with that of DraftKings and FanDuel, as contests run weekly during the NFL season and overall scores are added up across the enter season, but that is where the similarities stop. In the Yahoo Cup, everyone on the site who participates is competing against everyone else; there are no private leagues in this case.

Yahoo will be awarded $ 10,000 in prizes to the top points earners for Week 1 and presumably will be offering prizes for the remaining 15 weeks of the contest (it is only going through Week 16 of the NFL season). On top of that, the top 10,000 total points earners across all weeks will share $ 93,000 in prizes at the end of the Yahoo Cup with the winner earning $ 50,000.

It looks like in similarly-structured contests on Yahoo that consist of weekly contests adding up to longer competition only advance a certain number of players to subsequent rounds, but from the looks of it, everyone qualifies for every round of the Yahoo Cup. There is no requirement to participate in every week, though obviously a person’s chances of winning a season-end prize will be greatly diminished without submitting a lineup each and every week.

The best part: the Yahoo Cup is free to play.

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DraftKings, FanDuel to End College Sports DFS Contests

 DraftKings, FanDuel to End College Sports DFS Contests

This weekend marks the end of the college basketball season and with it, the end of college sports contests on daily fantasy sports (DFS) sites DraftKings and FanDuel. The two DFS leaders announced Thursday that after Monday’s championship game of the men’s NCAA basketball tournament, they will cease offering contests on college sports.

Gambling on college sports, while extremely prevalent, has always been more controversial than gambling in professional sports. And since many (most?) people consider DFS gambling, DFS games based on college sports have been a sticky issue.

According to ESPN.com, though, the decision to stop college sports contests shouldn’t hurt the daily fantasy sports sites. College basketball and football combined make up only 3 percent of FanDuel’s revenue. As ESPN.com put it, “the NFL daily fantasy market is 10 to 20 times larger than the college football market.”

In a statement posted on its website, FanDuel said of the decision:

As a leader in calling for smart, common sense regulations for the fantasy sports industry, FanDuel has had months of productive conversations with the NCAA, their member institutions, and various state legislators to better understand their concerns around fantasy sports contests based on amateur athletics. It is clear that this is an issue that matters to a variety of constituencies and we feel that the best path forward is to suspend offering these contests pending resolution on the issue within state legislatures.

It added:

The NCAA’s home state of Indiana and our home state of New York were two of the first states to take up this debate. Indiana has passed and New York is considering fantasy sports laws that protect consumers, protect the right to play fantasy sports, AND contain carve-outs stating fantasy contests involving amateur sports are barred in their states. The Massachusetts Attorney General issued regulations with a similar carve-out. We supported all of these efforts, and going forward we will actively support bills containing the same provisions. We are pleased that we can work together with the NCAA on smart regulations for the fantasy sports industry.

In a statement published by ESPN.com, NCAA president Mark Emmert expressed his gratitude for the concession made by DraftKings and FanDuel:

We appreciate and commend DraftKings and FanDuel’s action to stop offering contests involving college, high school and youth sports,” NCAA president Mark Emmert said in a statement issued Thursday. “This action culminates months of hard work between all parties to reach a place that is good for amateur sports and most importantly, the young people who participate. We will work diligently with our member schools over the coming year to ensure such amateur sports ‘carve outs’ are included in pending states’ legislation.

As FanDuel mentioned, of the three states that have enacted DFS regulations, Massachusetts and Indiana have specifically included language that prohibits DFS sites from offering contests on amateur sports, which includes college sports. ESPN notes that of the 30 states to introduce DFS legislation this year, though, only five have included a ban on college sports.

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DraftKings, FanDuel Reach Settlement with NY AG, Will Cease Operations in NY

 DraftKings, FanDuel Reach Settlement with NY AG, Will Cease Operations in NY

On Monday, DraftKings, FanDuel, and the New York State Office of the Attorney General announced that they have reached a settlement in the legal battle over daily fantasy sports (DFS) in the Empire State. In exchange for the two DFS leaders withdrawing from the New York market until at least September, NY AG Eric Scheiderman has agreed to drop most of the charges against the two companies.

The reason September is key for DraftKings and FanDuel is because their appeal regarding the legality of DFS is scheduled to be heard that month. If the Court rules that DFS is, in fact, legal in the state, then one would assume that DraftKings and FanDuel could get right back to offering real money contests.

In the meantime, there are DFS bills circulating in the state legislature. According to the terms of the settlement, if one or more of the bills pass by the time the Senate and Assembly adjourn on June 30th, therefore legalizing DFS, then the lawsuits/charges levied against DraftKings and FanDuel by the New York Attorney General will be dropped except for the charges of False and Misleading Advertising.

If the Attorney General Schneiderman wins the appeal in September, DraftKings and FanDuel have agreed to do away with their lawsuits and appeals. The AG will do the same, but the false advertising charges will stick.

The sites have also agreed to process withdrawal requests from customers within seven days of when the requests are made. It appears that customers of the two sites can choose to keep their funds on deposit if they wish so that they can play in real money games if they find themselves logging in from a state in which the sites are still active. The sites are permitted to host free contests and can award prizes, as long as players are not required to pay an entry fee.

FanDuel posted a statement on its website, explaining the situation. The statement reads, in part:

New York is a critical state for FanDuel. FanDuel is headquartered in Manhattan, where we employ more than 170 young, smart, passionate fans who are committed to innovating and providing the best fantasy experience possible. We are proud to be one of New York’s largest startup companies, and while it is disheartening for us to restrict access to paid contests in our home state, we believe this is in the best interest of our company, the fantasy industry and our players while we continue to pursue legal clarity in New York.

DraftKings did, as well:

We are an industry leader in technology, innovation and consumer protections, and we are grateful to the hundreds of thousands of New Yorkers who have enjoyed playing fantasy sports on DraftKings for the last 4 years. We will continue to work with state lawmakers to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love.

On the other side, Attorney General Schneiderman celebrated:

I’m pleased to announce that both FanDuel and DraftKings will stop taking bets in New York State, consistent with New York State law and the cease-and-desist orders my office issued at the outset of this matter. As I’ve said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it. Today’s agreement also creates an expedited path to resolve this litigation should that law change or upon a decision by the appellate division. Regardless, our key claims against the companies for false advertising and consumer fraud are not affected by the agreement and will continue.

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