Daily fantasy sports sites are in a whole lot of trouble. For those who may be unfamiliar with what exactly these sites are, they’re basically platforms for abbreviated versions of fantasy sports, where real money is wagered. Users can pay entry fees to get into contests, and then choose lineups for a single day or week of competition in the hopes of finishing with a placement that earns a payout. The two main platforms for this version of fantasy sports are FanDuel and DraftKings, and lately both have come under a great deal of scrutiny.
It all began back in October when a DraftKings employee won $350,000 in a contest at FanDuel, sparking questions about the transparency and fairness of the entire daily fantasy industry. While said employee could not have known any more than anyone else about how his lineups would ultimately perform, the question is whether or not he used data to gain a better chance at creating a unique lineup. For instance, if the employee were entering a football contest and knew, from his work, that 80% of entrants were putting the same three or four players into their lineups, the employee would be able to steer clear of those players in the hopes of standing out.
It’s worth noting that the employee was ultimately found innocent of any wrongdoing, but even the possibility of corruption eventually led state governments to begin taking a closer looks at daily fantasy. Almost immediately, Nevada banned FanDuel and DraftKings from offering contests in the state. The decision, made by the Gaming Control Board, was based on the finding that daily fantasy constitutes illegal, unregulated sports wagering and thus requires a gaming license (which the sites may ultimately obtain in Nevada).
The Nevada decision alone might not have been disastrous for daily fantasy given that Nevada, more than any other state, would look to regulate and profit from any sort of gambling occurring within its borders. But more recently, New York state attorney general Eric T. Schneiderman made things even worse for daily fantasy, composing a cease-and-desist order to FanDuel and DraftKings and referring to them as “part of a multibillion-dollar scheme intended to evade the law and fleece sports fans across the country.” The sites are appealing the decision, bit it looks as if this will constitute another major blow.
Now the possibility of further bans and orders to stop business hangs ominously over the entire daily fantasy industry and its millions off regular users. And to some extent there’s nothing they can do. But one recent idea that’s begun to circulate a little bit in the media and in online discussions is that FanDuel and DraftKings could survive by turning to Bitcoin.
To many, Bitcoin still has a strange and misunderstood reputation. The currency has been exceptionally volatile since its meteoric rise in value back in 2013, and a lot of us still don’t know what to make of it. It’s being accepted by more vendors each month, including some major companies like Microsoft, and yet none of us really need to use it. Some view it more as a commodity for long-term investment, but even in this regard it can appear risky and mysterious. But in unregulated daily fantasy sports that may or may not constitute gambling, Bitcoin may at last fill a specific need that no other currency or commodity can address.
Bitcoin is classified as “an unregulated peer-to-peer digital currency,” as opposed to one issued by a centralized bank or regulated by government authorities. In the U.S., Bitcoin is allowed to operate freely but is not officially recognized or accepted in any government transactions. In short, officially speaking, it’s something of a pseudo-currency that people can acquire and spend as they please without any sort of government intervention. And that might make it absolutely ideal for use in daily fantasy sports, and frankly in other areas of online gaming or sports gambling.
If Bitcoin is still somewhat unfamiliar to you, think of it this way: imagine a portion of the population decided to start assigning real value to Monopoly money. You’d pay a given number of U.S. dollars for a dollar of Monopoly money, and from that point forward you could spend the Monopoly money however you please within the portion of the population that recognizes it. Spending $10 on a sports bet may be illegal in your state; but executing the same bet with “fake” money (that you nevertheless paid for) might exploit a sort of loophole, so long as you don’t directly use U.S. currency to make the bet.
It’s not yet clear how a court might react to this sort of shift in the daily fantasy market, but the theory is an interesting one. Given how much is at stake for the likes of FanDuel and DraftKings, it certainly