U.S. casinos want a piece of the fast-growing fantasy sports pie
This year’s Global Gaming Expo (G2E), the industry’s biggest trade show that began last week in Las Vegas is all abuzz with talk of fantasy sports, the business that’s gowning exponentially, but whose action remains elusive to major players like MGM Resorts International.
In July investments totaling $575 million were raised by rivals and industry leaders DraftKings and FanDuel from 21st Century Fox, KKR & Co. and Major League Baseball in an effort to attract players to their daily fantasy games (DFS) that pay out millions in cash prizes. According to a Bloomberg report, due to fantasy sports opaque legal status and rules in place by state authorities, such companies are prevented from joining in. MGM’s Chairman and Chief Executive Officer Jim Murren said, “I would like to know how it is we’re going to address this issue on a national level,” and that, “It’s extraordinarily ambiguous now.”
By 2020 customer spending may reach $17.7 billion, up from this year’s estimated $3.7 billion, on the fantasy sports industry where fans join leagues comprised of individual teams with real player rosters and compete in daily competitions for real cash. The industry and casino owners are frustrated by federal or local restrictions that prevent them from offering sports betting and online gambling. The casino’s core business of blackjack and slot machines are experiencing muted growth and owners are struggling to expand into new areas. Meanwhile, sports companies like FanDuel and DraftKings that are unregulated, are free to inundate TV networks with millions of dollars in advertisements, so the argument goes.
The complaint by casino executives is that while the the sports leagues like Major League Baseball and the National Football League say they object to traditional sports betting, they partake in the fantasy sports pie. Owned by the National Football League, NFL.com offers fantasy leagues and various related contests on its site, but they are free to enter. Currently the league prohibits its broadcast partners from running casino ads during games. Last year four pro leagues including the NFL, and the NCAA successfully sued New Jersey in order to prevent the state from legalizing sports betting.
Penn national Gaming Inc.’s Chief Executive Officer Tim Wilmot said, “The NFL is being exposed as hypocritical,” and “Lawmakers are starting to look at this and say, why is this different?”
