New Jersey Congressman
Frank Pallone has questioned the “hypocrisy” of the legal status of daily
fantasy sports (DFS) contests while sports betting continues to be blocked by
the federal government, after hearing testimony Wednesday on the legality of
Pallone, a ranking
member of the House Energy and Commerce Committee, said in his opening
statement to the Subcommittee on Commerce, Manufacturing and Trade that despite
its popularity, DFS contests are operated “in a murky legal framework by an
industry that is mostly unregulated”.
“It is crucial that
consumers know what they are purchasing when they sign up for DFS and that they
understand the risk of losing money in the process,” he said.
criticised the fact that neither DraftKings nor FanDuel accepted an invitation
to present testimony at the hearing, although they were represented by
the Fantasy Sports Trade Association.
According to Pallone,
DFS operators and the sports leagues that support them have failed to
demonstrate how daily fantasy sports contests differ from sports betting,
highlighting the fact that DraftKings has “quietly” secured a United Kingdom
gambling licence in order to offer its contest.
“I must also mention
the hypocrisy of those arguing that Daily Fantasy Sports is readily
distinguishable from traditional sports betting,” said Pallone. “While quietly
applying for and receiving gambling licenses in the United Kingdom, Daily
Fantasy operators continue to argue to interested states in the U.S.
that—unlike sports betting—it is not gambling. Their reliance on the arbitrary
distinction of skill and chance is also unconvincing, especially since both the
Department of Justice and the NFL have asserted that sports betting also is a
game of skill.”
“In New Jersey, voters
approved a 2-to-1 referendum in 2011 to allow sports betting at casinos and
racetracks,” Pallone added. “In response, every major professional sports
league joined together and sued the state to stop the plan’s implementation and
stifle the will of the voters. How can the professional sports leagues oppose
sports betting at casinos and racetracks, but support and prosper from the
betting that is taking place every day in daily fantasy sports? To date, the
leagues and others have not sufficiently explained the difference between
fantasy sports, sports betting and other forms of gambling.”