Daily Fantasy Sports Scandal Could Influence Future Online Poker Legislation

Posted on October 7th, 2015 by Daniel Ryder

 daily fantasy sports online poker New York Eric Schneiderman

New York Attorney General Eric Schneiderman is going after the daily fantasy sports market, but in the end his investigation could aid in online poker receiving more support for state regulation. (Image: Louis Lanzano/NY Daily News)

The daily fantasy sports (DFS) debacle currently unfolding could have significant repercussions on the overall online gambling industry and lead to states considering Internet poker legislation folding on such endeavors.

New York Attorney General Eric Schneiderman announced late Tuesday that his office has opened an official investigation into whether employees at DFS leaders DraftKings and FanDuel were privy to knowledge that aided in winning substantial amounts on rival platforms.

During week three of the NFL season, DraftKings employee Ethan Haskell placed second on FanDuel’s Sunday Million contest out of 22,989 entries.

Haskell’s $350,000 win came under scrutiny after it was revealed he might have used data from his company’s network in deciding which players to draft to his weekly roster.

New York Calls Turn

State Senator John Bonacic (R-District 42) has pushed hard for online poker in 2014 and 2015, twice introducing legislation to decriminalize the industry.

His Albany counterpart, Assemblyman Gary Pretlow (D-District 89), both lawmakers chairing their respective chamber’s racing and wagering committees, showed signs of warming up to the idea but the bill still stalled this year and never received a vote.

Bonacic held a hearing on the issue in September that was rather unattended by his constituents, yet the 25-year member of the New York State Legislature shows no signs of slowing down his drive in 2016.

That could change should Schneiderman’s probe into DraftKings and FanDuel uncover illegal activity. The outcome of New York’s decision to make DFS reveal its hole cards and its overall operations will likely have significant consequences on whether states and potentially Congress intervenes to regulate or prohibit such wagering platforms.

“The integrity of DraftKings/FanDuel … two dominant players in a daily fantasy sports industry that is estimated to generate approximately $2.6 billion in entry fees in 2015, and its policies and practices are matters of concern to the public, particularly to the many customers who put money at risk on your site each day,” the letter to the DFS operators read.

Politicians on both sides of the political aisle have been rather reluctant in moving iPoker propositions at even a snail’s pace, and the front-page headlines are likely to only further cement those tentative sentiments.

Maybe It’s Good News?

Those in favor of daily fantasy sports and Internet gambling in general could argue that the attorney general’s examination will be beneficial regardless of the office’s findings.

Should officials determine that DraftKings and FanDuel employees didn’t break any laws and insider information wasn’t utilized, the story will become much ado about nothing. Should they determine laws were broken, one can make the case that is precisely why not only online poker and casinos need regulated, but all forms of online gaming.

As so many gambling experts have declared, online poker is already being played not only in Nevada, New Jersey and Delaware, but all 50 states.

Its largely unregulated nature is prone to fraudulent schemes by offshore operators, Bonacic saying his bill would “take steps to protect consumers, combat compulsive gaming, and prevent minors from accessing online gaming sites.”

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