Will Industry Regulation Curb Technological Innovation?

The fantasy sports industry has seen exponential growth in the number of participants, revenue and value in just the past couple of years. FanDuel and DraftKings are the top fantasy contest providers, but these behemoths are only two of 125 contest operators of both season-long and daily fantasy sports contests. With a Congressional hearing set for May 11, and legislation pending in over 30 states, regulation of the fantasy sports industry poses special challenges to small- and medium-sized contest operators who do not have the profit margins of FanDuel and DraftKings. In addition to paying state registration or licensing fees that could be as high as $50,000, smaller fantasy sports operators must increase spending on technology to ensure compliance with newly-enacted laws.

Whether or not lawmakers consider fantasy sports to be gambling will determine how products are designed in the future. Fantasy sports contest operators assert that gambling differs from fantasy sports for several reasons, but most importantly because fantasy sports leagues are a game of skill that requires knowledge and strategy to win. In contrast, gambling and traditional sports betting allows people to win by chance rather than skill. Plus, it allows for betting on a single game with only one outcome.


Fantasy Sports: Will Industry Regulation Curb Technological Innovation?
By Kristy Gale

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