DraftKings and Fanduel DFS New York Settlement: Don’t Believe the Doom and Gloom

At first glance, the news that Daily Fantasy Sports operators DraftKings and FanDuel have reached a settlement to halt operating paid contests in New York immediately may seem like a decisive blow to the DFS industry. But further review and examination prove that this is indeed a good day for those who want to continue to play the games in New York State — and can possibly have positive ripple effects for Fantasy players everywhere.

For now, it appears New York DFS players will be blocked from the two sites that have become new tentpoles of our Fantasy industry in recent years. But that may just be a temporary state of affairs. In a Monday press conference, New York Attorney General Eric Schneiderman said that the agreement, “creates an expedited path to resolve this litigation.” And to further buttress that point, New York State

Assemblyman Dean Murray, appearing on SiriusXM Fantasy Sports Radio, suggested that a bill could be passed in as little as two weeks (but, realistically, it should be done before the legislature breaks in June). This issue, as Murray points out, is in the hands of legislators now, as there are a handful of bills being considered that will ultimately lead to DFS being permitted in the state.

Lawmakers have incentive to pass a law because of the considerable revenue DFS games can generate for New York State. So while you may not be able to play the games temporarily, and that can be frustrating, we have to look at the bigger picture. We will escape the deeper entanglements of the legal process and a law allowing DFS in New York may now be passed, in a process that could see itself resolved fairly quickly. The primary appeal originally scheduled to be heard in June, for instance, has been pushed to September, in a move that Schneiderman suggested was made to buy “more time” for a bill to be passed.

A bill legalizing DFS in New York will be quite a victory for the industry. Daily Fantasy Sports will no longer be viewed and portrayed negatively in the mainstream media, sometimes erroneously, as a suspicious and possibly harmful endeavor. And the companies will concurrently be providing a sizable amount of money — through taxes and fees — to the state of New York, which can be used to support education, infrastructure improvements, and a host of other positive endeavors.

As it has been so often said, New York, the media capital of the world, often sets the standards for the rest of the country. When a law is passed, the rest of the country may also be compelled to let the gates open and share in the financial bounty that DFS can bring to the local economy. Then, DFS can ultimately be viewed as industry that contributes to the overall good of the people. The great growth we have seen inside our Fantasy industry in all sectors can now be spread beyond our own boundaries.

There is absolutely no question that daily fantasy sports have contributed positively to the Fantasy sector in so many ways. As the DFS profile has rapidly grown, many strategic partners of the operators have seen the benefits, both financially and in depth of offerings. Passing a law allowing DFS in New York can set the tone for the operators to continue to expand their reach into other sectors, where other businessmen have already been openly willing to embrace them. When you have names like Jerry Jones, Robert Kraft, and Mark Cuban already showing their support for DFS, there is much hope for the operators to comfortably expand their visibility and reach once this entire process in New York works itself out.

Having been in the central mix of the Fantasy industry since the 1990s, I have often seen our games misunderstood and sometimes come under fire from the outside. I remember a time when seasonal Fantasy games were viewed with suspicion. When Will Clark was with the Baltimore Orioles, I interviewed him in spring training in 1999. and asked him what his opinion was of Fantasy Sports at the time. He raised his eyebrow, viewed me suspiciously, and asked me pointedly, “Isn’t that gambling?”

More than a decade and a half later, every Major League Baseball  clubhouse has a Fantasy Football league, and all of the professional sports leagues, most notably the NFL, openly engage in the tremendous passion the seasonal games stir. It didn’t always come easy, but with education and the willingness of industry leaders and difference-makers, such as Charlie Wiegert, seasonal Fantasy Sports are now a beloved and significant part of our essential fabric as sports fans.

And New York took the first steps today in pushing DFS down that same path. Don’t believe the misleading headlines or soft analysis saying that DraftKings and FanDuel suffered a blow today; this was a very good thing for the DFS industry, and the next few weeks — with positive momentum in the Senate and Assembly — should further emphasize this sentiment.