Hunting Bears: The Rise of Fantasy Sports Wagering
Fueled by mobile apps, easy access, and lax oversight, Fantasy sports betting has rapidly risen in the last year. Companies like DraftKings and FanDuel generate income that rivals traditional sports betting, primarily because US lawmakers exempted fantasy sports from a decades-long ban of online gambling.
Peter Sagal, in The Book of Vice, tells the following joke:
"A guy goes bear hunting. He spots his quarry in a clearing, raises his rifle, and fires. But there’s no bear corpse to be seen. Instead, there’s a tap on his shoulder. It’s the bear, with claws extended. The hunter’s doomed, and he knows it. But the bear, saying it’s in a forgiving mood, offers the hunter his freedom... in exchange for agreeing to perform a highly obscene interspecies sexual act. The hunter, despite his misgivings, agrees.
After limping home, the hunter gets mad. He buys himself a brand-new fully automatic AK-47, heads back into the woods, finds the bear in that same clearing, and blasts away, emptying the whole clip. The cordite clears, and... nothing. Once again, there’s a tap on his shoulder, and once again the smiling bear demands something even more obscene, and painful, in exchange for letting the hunter go.
After making up something to tell the emergency-room doctors, the hunter becomes obsessed with vengeance. With contacts in the black market, he acquires some fearsome munitions, and heads back into the woods. As soon as that bear shows its head in the clearing, the hunter launches his arsenal: rockets, grenades, cannon fire. Trees fall, birds die from the fright alone. When he’s fired everything he brought with him, the hunter crawls up to the edge of the smoking crater. Nothing there. He closes his eyes, and isn’t surprised by the tap on the shoulder when it finally comes.
"Well," says the bear, "clearly you're not in this for the hunting."
Last week, PayPal quietly reentered the online gambling market. For the first time in a decade, PayPal is now an accepted form of payment on at least two U.S. online gambling websites. This discreet move by one of the world’s largest international payment companies may be in response to the dramatic increase in fantasy sports betting currently gripping the United States.
The Fantasy Sports Trade Association (FSTA) estimates that almost 57 million people in the U.S. and Canada play fantasy sports, an increase of 15 million over last year. Fantasy sports players also spend an average of $465 per year on the game, up from $95 in 2012. That means the market for fantasy sports is $26 billion, twice the annual revenue of the National Football League. Norm Chad of tThe Washington Post reports that DraftKings was the single largest advertiser during the opening week of the NFL season; DraftKings and FanDuel generated $60 million in entry fees that same week, twice as much money as Las Vegas sports books handled. DraftKings is also the official daily fantasy sports platform across all of ESPN.
And no one is in it for the hunting; they're in it for the money.
“The continuing increase in fantasy sports participation illustrates several core, engaging elements of fantasy play,” says FSTA President Paul Charchian. “Fantasy sports remains a social activity, made more enjoyable when playing with friends. Our remarkable growth in the last year is fueled by many innovations in the industry, including dramatic improvements in mobile offerings and the rise of daily fantasy sports.”
What makes the growth of fantasy sports significant is that online gambling has been outlawed in the United States for almost 10 years. Only recently have states like New Jersey, Delaware, and Nevada rolled back legislation banning the activity. In 2013, New Jersey became the first state to “fully” legalize online gambling, according to Lee Fenton of Gamesys.
But, when Congress passed the Unlawful Internet Gambling Enforcement Act back in 2006, they specifically excluded fantasy sports. Fantasy sports were deemed "games of skill" — unlike Poker and Blackjack which are "games of chance" — and are therefore legal.
I’m not buying it. Whether I decide which cards to play in poker or which players to play in fantasy sports, it’s all gambling.
For the unfamiliar, fantasy sports work by choosing players whose performance is scored. Total the scores of your players and if the sum beats your opponent’s, you win. Sites like DraftKings and FanDuel offer weekly fantasy games that have stepped up the risk and the payouts. You pay an entry fee, choose your players, and hope you win. As DraftKings says, “Pick your sport. Pick your players. Pick up your cash.” Often to the tune of $1 million weekly prizes. And the convenient thing about one-week fantasy games is that you don’t have to play the same players for the course of a season. If your team loses this week, you can get all new players next week, and the only thing you’ve lost is your money. CNN reports that DraftKings plans to pay out close to $2 billion in prizes this year.
The broader question is why now? Why the resurgence in fantasy sports wagering? Certainly, the prize money attracts people, but the use of mobile devices has added a layer of convenience that appeals to many. “Fantasy activities have shifted dramatically to mobile devices,” says FSTA Research Chair and Director of Fantasy Sports at CBS Sports, Danielle MacLean, “and we are seeing growth in gaming consoles and internet-connected TVs.”
The first thing he noticed was that Las Vegas seemed to have invented a new school of functional architecture, 'The Gilded Mousetrap School' he thought it might be called, whose main purpose was to channel the customer-mouse into the central gambling trap whether he wanted the cheese or not.”
— Ian Fleming, Diamonds Are Forever
The betting table has moved from the casino to our pockets. As a fantasy football player for almost 20 years, I like the expediency of accessing my team and players through an app. And as large payment processors like PayPal return to online gambling and more people use their phones to wager on their teams, we can surely expect more risky bets and more payouts to follow.
Gambling "is part of 'the adventurer within us' — that part of ourselves which lusts for change, the wooing of the unknown, chance, danger, all that is new," says Felicia F. Campbell, associate professor in the English Department at the University of Nevada at Las Vegas, "It sends us to both the gaming tables and the moon, the laboratory and the numbers man. It is part of what makes us human."
Indeed, Sagal might be wrong. Perhaps we are in it for the hunting, for the thrill of winning. Either way, fantasy sports platforms plan to make lots of money.
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