DFS Has Won Consumer Protection, 'Game of Skill' Arguments

Lessons Online Poker Can Take From The New York Daily Fantasy Sports Effort

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New York was a stark example for proponents of online poker: a daily fantasy sports bill made it to the governor, while an online poker bill died on the vine after passing the Senate.

Why is that? And what can online poker learn from the success of DFS?

Dissonance on DFS, online poker

There are a number of reasons why the DFS bill in New York — and in a number of other states — reached the finish line. And those variables, in many cases, are out of online poker’s control.

Most notably, there is the starting point of the industry. DFS operates in a very public way — with companies based in the US — in a lot of states in a quasi-legal environment. Meanwhile, online poker is considered illegal outside of New Jersey, Nevada and Delaware, despite the fact that a variety of offshore operators serve the country. (That starting point is largely thanks to the UIGEA.)

DFS legislation has been passed in seven legislatures — and signed into law in six — so far. That’s despite the fact that the bills generate a meaningless amount of revenue for state budgets. (In Missouri, there’s been confusion about how much revenue its law will produce, but otherwise, this is true.)

Online poker, meanwhile, can generate tens or hundreds of millions of dollars in revenue via taxes and licensing fees.

So we’re stuck with the dissonance that bills that create meaningful revenue sit on the sidelines, while a bill overseeing a similar industry that does get passed.

Still, DFS efforts have succeeded where online poker has failed that can provide a road map for the latter.

Consumer protection

Part of the reason for the dissonance between DFS and poker? DFS has won the battle on “consumer protection.”

Why is it so much more important to protect DFS players than poker players? It’s really not. But lobbying for the DFS industry has made this a calling card of its lobbying everywhere. And it’s a message that resonates.

Online poker and the Poker Players Alliance, to its credit, has ramped up lobbying on the consumer protection angle, and has even tried to piggyback on the DFS efforts in some states.

Given the relative lack of differences in the mechanics of online poker and DFS, the idea of protecting consumers should be a winning one.

But that also leads to another front where DFS is winning the war.

‘Game of skill’

DFS has convinced lawmakers in a lot of states that it is, in fact, not gambling, and is a game of skill. At the same time, that is not an argument poker has always won.

In reality, who cares if DFS or poker is gambling or not — both are markets with billions of dollars changing hands. And, no matter what anyone tells you, there’s some element of chance involved in the outcome in both, over certain sample sizes.

But, DFS has avoided any of the complications of passing a gambling expansion with the narrative that fantasy sports is a game of skill that people like to play for fun.

Of course, there is mountains of evidence and some court rulings saying that poker is also a skill-based activity, although it’s not an argument online poker finds itself winning in statehouses.

Based on the success of the DFS industry on this front, it would be prudent to redouble efforts on this area, although the idea that poker and gambling are one in the same is likely a difficult one to overcome.

Find champions

The first two items lead to this one: The DFS industry has done an amazing job of finding lawmakers to advance its interests.

The authors and co-sponsors of DFS legislation are usually whole-hearted believers in the first two points above.

The list of online poker “champions” on these items is relatively small. The DFS industry has found lawmakers in a variety of states that are 100 percent on the same page, and vocally advocate for the bill.

Do these same lawmakers exist for online poker? They may be tougher to find, but they must exist. Finding more of them should be a priority.

Can poker follow the DFS roadmap?

Online poker cannot employ a strategy that exactly mirrors what the DFS industry does. Quite simply, there are major differences between the two industries as currently situated.

That does not mean, however, that online poker can’t try to emulate the success of DFS and use some of the same strategies.

- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner. He has played poker recreationally for his entire adult life and has written about poker since 2008.
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