FanDuel and DraftKings are fighting for their legal lives behind the argument that daily fantasy sports is a contest of skill, not luck. John Oliver isn't buying it.

During his show Sunday, the talk show host ran through a list of reasons fantasy sports sites FanDuel and DraftKings should be advertised and regulated for what he says they are.

"By any rational definition, daily fantasy is gambling," said Oliver.

Oliver's show Sunday followed months of controversy as states have started cracking down on daily fantasy sports, a hyper-quick version of a traditionally slower form of betting. (On FanDuel, users can win money in one-day contests that hinge on the performance of real-life athletes.) New York's attorney general slapped both FanDuel and DraftKings with a cease-and-desist order earlier this month. As of last month, Nevada is requiring the sites get licenses after declaring that fantasy sports betting qualified as gambling.

FanDuel's chief financial officer, Matt King, has insisted the site does not constitute gambling but is an "entertainment product." Oliver contends that FanDuel and DraftKings are gambling--and that both billion-dollar startups know it. Here are some of the points he makes.

  • The DraftKings CEO has said his company's product "actually in many ways has a similar feel to poker."
  • DraftKings sponsored this year's World Series of Poker. "They're basically saying if you love gambling, you'll love DraftKings for completely unrelated reasons," said Oliver.
  • Being an entertainment product is not mutually exclusive from being a gambling product.
  • Most winnings go to a small fraction of top winners. Among fantasy sports participants, 85 percent lose and 91 percent of winnings to 1.3 percent of the users.
  • And, like gambling, fantasy sports get folks hooked. Oliver described the games as "the most addictive thing you can do on your phone other than, perhaps, cocaine."

"If we're going to de facto legalize sports gambling across the U.S., we should at least do it on purpose and not because two companies have somehow weaseled out a way to pretend that they are not something that they clearly are--because gambling enterprises, wherever they are legal, are regulated to protect people, and that's going to need to happen here," Oliver said. "And until such time if they're going to keep bombarding us with those ads, they should at least make them a little more honest." 

FanDuel director of communications Justine Sacco says the company has called for regulations in the industry of fantasy sports, citing a blog post by FanDuel CEO Nigel Eccles. 

"We've called for regulations that safeguard consumers," says Sacco. "I was surprised that John Oliver didn't highlight the fact that we're probably the only company that has invited regulation. We're willing to work with lawmakers and regulators to ensure that common-sense regulations are put in place to protect consumers."  

"We strongly believe the games offered by fantasy sports sites and fantasy sports in general do not constitute gambling," DraftKings said in a statement. "Fantasy sports is very much a game of skill, and submitting the winning lineup is a direct function of that skill and strategy."  

Watch John Oliver's segment on fantasy sports here: 

 

Published on: Nov 16, 2015