Wednesday was a relatively quiet day on the daily fantasy sports front, which probably means Preet Bharara is waiting until this article is published to send indictment-toting goons crashing through the doors of DFS operators, but here’s a quick update until then.
Perennial third-ranked DFS operator Yahoo has reportedly been added to the list of companies being investigated by New York Attorney General Eric Schneiderman. The New York Times reported that Schneiderman, who on Tuesday filed for preliminary injunctions to enforce the cease & desist orders he gave DraftKings and FanDuel last week, has also served Yahoo with a subpoena.
Yahoo issued a statement saying it “does not comment on legal matters” but has reportedly yet to kiss its New York players goodbye. On Tuesday, FanDuel announced that it was temporarily suspending its operations in New York, while DraftKings said it would continue dealing with New York players pending the outcome of a Nov. 25 court hearing.
Yahoo is likely not the last DFS operator to find itself in Schneiderman’s sights. The Fantasy Sports Trade Association issued an email warning members that they should consider themselves “on notice” that Schneiderman is apparently sitting on a Gotham rooftop, dressed in black, scowling as he surveys all the rank criminality in the filthy streets below.
DRAFTKINGS INTRODUCES PROBLEM GAMBLING MEASURES
Meanwhile, DraftKings quietly introduced a new responsible gambling section on its website at some point over the past week. The change, first spotted by Boston.com, offers players the ability to self-exclude from the site for periods ranging from three months to five years.
DraftKings issued a statement saying that it had offered self-exclusion options via its customer service teams “for a while now,” but the new option allows players the ability to take action without anyone’s assistance. DraftKings said the change was made “to maximize the integrity of our product and the protection of our players.”
The shift is undoubtedly an attempt to appear proactive in the face of continued examination by regulators, legislators and law enforcement. But just like DraftKings securing a UK gambling license, the self-exclusion policy – a common feature on real-money online gambling sites – will likely embolden critics who view DFS operators as gambling wolves in sheep’s clothing.
NFL CUTS OUT FANDUEL?
On Friday, legal filings by both DraftKings and FanDuel claimed that Schneiderman’s anti-DFS crusade was having a “chilling effect” on the companies’ ability to both attract new investment and maintain existing relationships with strategic partners.
On Wednesday, Dustin Gouker, who covers DFS for LegalSportsReport.com, noticed that the NFL.com site’s Daily Fantasy Mailbag page no longer carried a ‘Presented by FanDuel’ banner. It’s unknown which party initiated the change but the New York Post reported last week that the NFL was “reviewing the entire fantasy sports situation” in light of the ever increasing controversy.
DRAFTDAY ACQUIRES RIVAL’S DATABASE
The negative press hasn’t dampened the enthusiasm of DFS B2B platform provider DraftDay Gaming Group, which announced on Wednesday that it had acquired the customer database of Sports Tradex LLC. DraftDay, which is jointly owned by UK pools and race betting operator Sportech and marketing rewards platform Viggle, didn’t disclose what it paid for the customer list.
DraftDay president Nic Sulsky said SportsTradex was one of the few other DFS operators to offer pick’em games and tiered draft formats. Sulsky said DraftDay was “committed to providing the same great games and superior customer service” to SportsTradex players, while claiming that DraftDay’s pick ‘em slate “represents a key product in our alternate tournament catalog.”
DFS TV AD SPENDING FLOATS ALL BOATS
Finally, a new report issued on Wednesday claimed that DFS television advertising was so prevalent in the third quarter that it helped boost overall ad prices, even for media companies that don’t have any sports programming.
Sanford C. Bernstein analyst Todd Juenger said TV ad spending grew by $227m in Q3, $134m of which came from DFS operators. Both DraftKings and FanDuel have dramatically reduced TV ad buys in recent weeks, which the operators insist was a long-planned strategy and not an attempt to lower their profile in the hopes that investigators would go away.
Juenger says CBS claimed the biggest slice of the DFS ad pie, earning $29m, roughly 3% of its total Q3 ad revenue. Similarly gargantuan windfalls were enjoyed by ESPN ($23m, 1.3%), NBC ($21m, 2.6%) and Fox ($18m, 3.3%), while other networks split the remaining $44m.