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Small fantasy operators protest growing DraftKings, FanDuel duopoly

TAGs: daily fantasy sports, DraftKings, fanduel, Fantasy Sports Trade Association, sbfsta, small businesses of fantasy sports trade association

daily-fantasy-sports-duopolyA new group representing nearly three dozen small fantasy sports operators wants legislators to push back against the duopoly enjoyed by daily fantasy sports giants DraftKings and FanDuel.

On Tuesday, the Small Businesses of Fantasy Sports Trade Association (SBFSTA) a new organization comprised of 35 small daily and season-long fantasy operators, held a press conference in New York aimed at alerting legislators to their complicity in helping DraftKings and FanDuel fend off current and future competition.

The SBFSTA chose New York as the site of their debut in part due to pending DFS legislation in the state that would require operators to ante up a $500k deposit in order to obtain a New York license. The SBFSTA insists that this hurdle is sufficiently high to preclude licensing of most fantasy operators other than DraftKings, FanDuel and third-ranked DFS site Yahoo.

Legislation recently approved in Indiana and Virginia sets a lower bar ($50k) for initial entry but the SBFSTA insists this is also too high. The group would like to see an option for smaller operators to pay 5% of net revenue, rather than the 15% of gross revenue proposed under New York’s pending legislation.

The SBFSTA makes no bones about how legislators arrived at the figures in their various bills, noting that the Fantasy Sports Trade Association (FSTA) has been the driving force behind getting these bills introduced and passed.

The SBFSTA – whose members include FantasyDraft, Fantasy Aces and Star Fantasy Leagues – says the FSTA is supposed to represent “all of its members, big and small” but has been “co-opted by DraftKings and FanDuel, which have led the charge to pass legislation across the country that effectively shuts down smaller operators.”

The SBFSTA says it has met with staffers of New York legislators Sen. John Bonacic and Rep. Gary Pretlow, who head their respective chambers’ gaming committees. Alex Kaganovsky, whose Fantasy Football Players Championship is a member of the new group, said the meetings indicated that legislators “are not really aware that these bills could and will impact small companies like ours.”

DraftKings, FanDuel and Yahoo all exited the New York market last week after reaching deals with state Attorney General Eric Schneiderman to halt their legal fight while legislators consider bringing DFS under the umbrella of legally permissible activity. The state’s current legislative session adjourns in June.

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