Welcome to the Winner’s Circle, a weekly column by Bet For The Win senior writer Prince J. Grimes.
Jeremy Levine, the founder and co-CEO of Underdog Fantasy, posted a letter to the popular daily fantasy sports website last Wednesday accusing FanDuel and DraftKings of working hard to “eliminate fantasy sports innovation, kill competition, and boost their bottom lines at the expense of sports fans.”
The two sports betting giants, he said, were wagering a campaign in back rooms across the country that he intended to pull out of the shadows.
At the heart of their alleged campaign are the daily fantasy pick’em games popularized by companies like Underdog and PrizePicks that very closely resemble what bettors know as prop and parlay betting. How so? Here’s an example:
Underdog’s pick’em options Monday included whether Houston Astros pitcher Framber Valdez would have more or less than 5.5 strikeouts. That selection could be paired with a pick from another team like New York Yankees pitcher Clarke Schmidt to go over 4.5 strikeouts. Just like a bet — the numbers were identical to the prop lines offered at DraftKings — you pick a dollar amount to place on those outcomes and only win if both occur.
Via Underdog Fantasy app
Fantasy operators don’t need sports betting licenses to offer these games in states that haven’t banned them yet, but in recent weeks, states across the country have been re-evaluating whether these games actually fall under the umbrella of fantasy sports, with some like New York, Maryland and Ohio deciding they don’t.
On Thursday, Michigan joined the conversation with the proposal of new DFS rules that prohibit “any fantasy contests that involve, result in, or have the effect of mimicking betting on sports.”
The MGCB also proposed a prohibition on "Any fantasy contests that involve, result in, or have the effect of mimicking betting on sports."
The proposed rules need to be approved by the Michigan legislature before going into effect.
— RLinnehanXL (@RLinnehanXl) August 10, 2023
According to Levine, FanDuel and DraftKings, which got their start in daily fantasy games, are behind this recent push for new legislation — a pivot from the laws he said the two companies “literally wrote – long before sports betting came onto the scene.”
“What do monopolists do when they are afraid of competition? They use their money, power, and influence to target competitors,” Levine wrote. “That’s the playbook FanDuel and DraftKings are following, leaning on backroom lobbyists and pressing business partners to do their dirty work for them. It’s a classic play for entrenched big businesses who are afraid of competition.”
“It’s unfortunate DraftKings and FanDuel, the same companies that championed fantasy sports as skill-based for years, have changed their tune at the first sign of competition,” the Coalition for Fantasy Sports, which represents Underdog, PrizePicks and others, said in a statement. “It’s a thinly veiled attempt to create a false narrative and position themselves as the only games in town.”
FanDuel and DraftKings have been trying for the past year to slow us, but they're failing because our games operate squarely within the laws. Our games are approved by regulators and defined as fantasy in many states, including those where they regulate both fantasy and betting.
— Jeremy Levine (@JerLevine) August 9, 2023
However, while it’s likely true that FanDuel and DraftKings’ motive in trying to have fantasy laws rewritten — if they are indeed behind the push — would be to eliminate competition, the argument falls apart in one key area: they aren’t necessarily wrong. These pick’em-style games do appear to be the same as sports betting.
“There are companies today posing as fantasy-sports operators, and they are running illegal sportsbooks,” FanDuel head of state government relations Cesar Fernandez said in July at the National Council of Legislators from Gaming States conference, without specifically naming an operator.
The key distinction between fantasy sports and sports betting is supposed to be in how much skill each requires. Fantasy games, by most definitions, require more skill on the part of the participant. However, in my opinion, when you’re specifically picking stats — or lines — set by a house that isn’t in the business of losing money, skill mostly goes out the window. That’s when luck comes into play and games cross the thin line into betting. That’s why I struggle to see the difference between pick’em-style games and prop bet parlays.
So, while everything Levine said about FanDuel and DraftKings’ intentions may be true, I’m not sure this is a battle the Coalition for Fantasy Sports can expect to win in every state. Underdog’s Pick’em games just launched in Colorado, where Levine said regulators agree it’s a fantasy game. Complaints in Maine and Wyoming make it clear not everyone agrees.
