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All bets down for the future of DFS and online gambling




Cash strapped states are looking at expanded gambling as an additional revenue source and both Daily Fantasy Sports and online gambling are on the table.

A recent Massachusetts report examined the Skill vs. Luck debate

If anything might be a sure thing or a lock in gambling is we often reflect on how "lucky" we got. I cannot recall anyone shouting how "skilled" they were on that back-door cover. Oh yeah, you might hear some goof in the Aqueduct grandstand telling you how brilliant he is on why he bet the five-horse or brag about their winning streak. But bottom line, over time, along with skill, it purely involves a high percentage of luck whether you'll be in the black.

Therefore, why is the Daily Fantasy Sports (DFS) industry losing sleep this week over the black and white definition in gambling of skill versus luck. You see, it's virtually impossible to objective separate and define it and that's bad news for them and likely for the online gaming legislative community as well.

Mass Confusion

The state of Massachusetts needs additional tax money as do most other states. They were willing to take up the discussion of adding both DFS and online gaming by requesting a special report to address the issue. Last week they read "The Report of the Special Commission for Comprehensive Study relative to Daily Fantasy Sports and Online Gaming". It was comprehensive indeed, covering 68 total pages involving some interesting findings trying to tie-in DFS with online gaming.

Massachusetts DFS online gamblingBy far, the biggest problem and anger to both the DFS and online gaming sectors was putting them together to potentially evaluate their merits. To them, it was like evaluating opera and rock and roll as music category alternatives. You might love or hate them both, but two completely different choices. It simply doesn't make any sense lumping them together to create state laws.

And speaking of laws, the report contained language not only referencing the federal Wire Act from 1961, the UIGEA (Unlawful Internet Gaming Enforcement Act), plus PASPA (Professional and Amateur Sports Protection Act), but gaming laws creating in Massachusetts dating back to 1895. Anyone hell-bent against both DFS and online gaming will surely dig those out beyond the skill vs. luck argument.

The well-researched report encapsulated data from the origins of legalized online gaming in the U.S. it has been proven that New Jersey has built a consistent, profitable business since beginning in November 2013 without sacrificing their land-based operations in Atlantic City. Delaware and Nevada have not been as successful, but have been burdened with restrictions involving either state government or limited casino game play. But overall, there has not been nearly enough results to make any hard conclusions about online gaming nor DFS to date. On the plus side, there are many positive aspects listed in the Massachusetts report including tax benefits and job creation.

As for DFS, it is now legal in 15 U.S. states with the approval of Maine earlier this week. Individual tax and licensing fees are in place in each state with specific rules involving age restrictions, funds for problem gaming etc. It has created a gateway for dominating industry titans Draft Kings and Fan Duel, but no doubt will change the way they do business versus the past . . .  forever.

The report even threw in reasonable mention and statistics about eSports. It signaled their tremendous growth in other countries and made it sound like a warning to legislators to take it serious in the discussion as well. Another debate could be on the horizon asking if playing eSports was a serious "skill". Is BETTING on eSports inn the U.S. far behind? Is it simply luck to know the best League of Legends teams, their hot streaks, etc. Or a skill to know "the players/athletes" tendencies? The only lock is a group of attorneys will be asked to evaluate.

Skill or Luck?

Though interesting and very informative, I cannot evaluate how much will be accomplished moving ahead legalizing either DFS or online gaming in Massachusetts, except possibly slowing down the process. In fact, it might be a template for other states to follow as well, including Pennsylvania, which could be on the doorstep of legalizing online gaming.

A big problem is determining the legalese of what involves skill compared to luck in gambling. A hurdle the DFS industry has been using to their positive advantage that their players compete in a 100% skill game. Until now.

By categorizing DFS in the same menu as online gaming could set them back and tarnish their reputation. For that they can blame themselves, in the wake of a well-publicized scandal two years ago. An employee at Draft Kings, won $350,000 with inside information at rival site Fan Duel. It also set a muddled precedent involving the current U.S. sports legalization wagering debate. In general, the word "skill" took a big integrity hit in both reality and legal definition in this world.

Again, it is impossible to 100% objectively determine the difference between skill compared to luck in wagering. The only reasonable conclusion all can agree on is the pure element of RISK. We all want to believe that James Bond is brilliant and skillful at the baccarat table. That's because it makes for a boring movie to see him lose a million at the casino. And nobody comes home to tell their wife how unlucky he was at the track.

The reality is whether either DFS or online gaming is skill or luck, many states need incremental tax revenue and many people need new created jobs to feed their families. Bottom line Massachusetts or any other U.S. state: How you got to work doesn't matter as long as you got to work on time today.

Glenn Greene covers the games from a betting angle every week exclusively at OSGA.com. For weekly betting insights, inlcuding previews and picks from Glenn, click here.