In the wake of a clampdown on daily fantasy sports operators in New York State, Nevada and elsewhere, the benefits of Bitcoin are receiving attention once again as a potential deal-breaker.
Fantasy Sports in the Crosshairs
Fantasy sports players create sports teams, the success of which is measured against the real-life success of each athlete, and often bet money on this success. The phenomenon has over 56 million players in North America and half a million in New York, but has come under increasing regulatory pressure in recent times.
“Daily Fantasy Sports are creating the same public health and economic concerns as other forms of gambling,” New York Attorney General Eric Schneiderman said Tuesday amid an investigation into DraftKings and FanDuel, two major daily fantasy sports sites spearheading an industry, whose market size is expected to reach $2.5 billion by 2020.
Schneiderman’s office issued cease and desist notices to both companies, copying a previous move by the state of Nevada.
The issue, legislators claim, lies in the distinction between daily and traditional fantasy sports. In the latter, Schneiderman wrote, “participants in traditional fantasy sports conduct a competitive draft, compete over the course of a long season, and repeatedly adjust their teams,” whereas the snap stakes and “easy winnings” in daily fantasy sports means operators are liable to false advertising, CNN reports.
As such, any operator accused of accepting customer funds in USD to provide a non-transparent service risks being shut down, DraftKings having recently come under scrutiny after issuing a $350,000 USD payout on a stake.
Nonetheless, the battle wages on between operators and legislators, the latter drawing comparisons between daily fantasy and the lottery, which Market Watch notes is in itself a curious case of legislative hypocrisy.
Less surprising, however, is the growing consensus that the way out for consumers is not to switch location, or even operators; switching currency, or rather the ‘type’ of currency, is in-vogue. What does this suggest? One thing only: move into Bitcoin.
“Bitcoin is going to be the international currency that everyone is going to use,” Alex Paul, creator of Bitcoin-only fantasy football operator Fantasy Bit League told TechCrunch last year.
If recent coverage is anything to go by, Paul’s prophecy may be turning into reality quicker than even he might have anticipated. In addition to MarketWatch, SocialBarrel also recently brought out an article championing the potential of Bitcoin to rescue the industry from regulators, while there is now even a dedicated review and rating service for Bitcoin sports book operators.
Bitcoin’s status as a neither-here-nor-there currency in the US is the principle facilitator of its usefulness as a gambling medium. How regulators would react to en masse purchasing of Bitcoin by people from a pool of over 50 million players (see chart below) for use on sites such as DraftKings and FanDuel is unknown, though the price will probably benefit from the uptick in demand. Keep in mind that this is the same demographic that shelled out a cumulative $11 billion on league dues, research, and web hosting fees, according to the Fantasy Sports Trade Association.
But would Bitcoin even have the sanitary image needed to appeal to the mainstream gambler? To this end, Liberty.me touches on a salient topic.
“The underground economy employed half the world’s workers as of 2009, and is growing rapidly,” Justus Ranvier wrote last year, citing a statistic by Kristov Atlas. He continued:
“Remember this fact when you hear people talk about how Bitcoin needs to clean up its hypothetical image problem in order to ‘go mainstream.’ The regulated, above-the-table, law-abiding economy is a shrinking minority – a dying paradigm.”
If you’re curious about what Bitcoin-based fantasy sports currently have on offer, Bitcoin.com recommends checking out the dedicated list here, which ranks operators for added convenience.
Do you think Bitcoin will play a bigger role in the fantasy sports industry? Let us know in the comments below!
Images courtesy of eegaming.org, Eilers Research LLC, qz.com