Daily fantasy sports operator DraftKings has begun instituting overdue consumer protection guidelines, including a ban on the use of third-party scripting tools and tagging a scarlet letter on high-volume players.
On Friday, DraftKings customers received emails announcing that the site would introduce a new bespoke lineup creation tool. The site also announced that it would “prohibit the use of scripts and other automated means of interacting with our site” as of Jan. 29.
The company says it is “committed to providing competitive and entertaining contests for our players while ensuring transparency of the daily fantasy sports industry.” More cynical observers are noting that DraftKings embraced its newfound commitment to transparency only after the industry came under sustained regulatory and legal pressure in multiple states.
It was only last July that DraftKings modified its terms of service to permit third-party scripting tools, leading much of the community to accuse the company of catering to its high-volume customers, from whom DraftKings earns a significant chunk of its revenue.
The use of automated scripting tools is highly controversial in the DFS community, with many viewing it as giving sharks extra ammo with which to prey on less experienced and/or less technically savvy players.
The tools allowed players to respond to player injuries or weather conditions, making last-minute revisions to dozens or even hundreds of lineups at a pace that ordinary players couldn’t match. Such tools are partially responsible for the fact that the overwhelming bulk of DFS profits are won by a mere handful of players.
Newly installed DraftKings CMO Janel Holian told the Boston Globe that the company would also begin labeling experienced DFS players so that less experienced players will have the option of declining to go head-to-head against sharks. The specifics are still being hashed out but Holian said the labeling would begin in the “near future.”
DraftKings is also putting entry limits on certain guaranteed prize pools (GPP) to reduce the capacity of DFS sharks to tip the balance of winning. Other GPPs will be ring-fenced to restrict participation to beginners.
The ban on scripting tools and the other tweaks were among the consumer protections proposed in November by Maura Healey, the state Attorney General in DraftKings’ home state of Massachusetts. Clearly, DraftKings is looking to stay on her good graces.
The changes are also intended to blunt arguments made by New York Attorney General Eric Schneiderman, who has filed a criminal complaint against DraftKings and FanDuel for offering illegal gambling services to New York residents.
Schneiderman isn’t likely to be deterred in his pursuit of the companies, but the policy changes could help convince other state attorneys general not to follow Schneiderman’s lead and take their DFS objections to the courts.
