Poker’s Dalliance With Daily Fantasy Sports Could Spell Disaster

wsopDuring the last few weeks poker fans all over the world have been tuned into ESPN’s coverage of the 2015 World Series of Poker Main Event, but while they watch, another game straddling the line between gambling and skill has managed to steal the show.

Every time viewers see footage of poker’s premiere tournament, they’re also greeted by the distinctive logo of DraftKings – one of two titans (along with FanDuel) currently fueling the Daily Fantasy Sports (DFS) industry’s explosive growth. Along with large logos adorning the felt, DraftKings’ presence is intertwined throughout every aspect of the WSOP’s programming. The Main Event itself is “presented by DraftKings,” most players at the televised feature table don patches as one-time representatives of the site, and the logo also accompanies the on-screen graphics depicting chip counts and other pertinent poker information.

For hardcore poker fans, this comprehensive sponsorship arrangement between the WSOP and DraftKings probably doesn’t pose too much of a distraction. After all, the overlap between poker players and DFS enthusiasts has been well-documented, and the two games share many of the same selling points: a blend of skill and chance, the potential to turn a small buy-in into a big time payout, and the element of competition. If you can name every player at the feature table and know the last 10 winners of the Main Event, chances are high that DraftKings’ presence is nothing to worry about, and maybe even something to relish.

But for casual poker fans – those who enjoy watching WSOP broadcasts and only play live or online on occasion – the idea that poker has partnered with a DFS superpower might be more worrisome.

draftkingsThe mainstream news cycle has been dominated by DFS scandals during the last month, following the inadvertent leak of insider information by DraftKings employee Ethan Haskell. When Haskell accidentally linked to a page containing ownership data for the site’s most prominent contest, the Millionaire Maker. As noted by DFS experts, this ownership data – showing the rates at which NFL players were included in lineups for that week – is routinely released to the public, but only after lineups are locked.

Having access to this data before the games begin obviously provides a huge edge, as DFS players can adjust their lineups to obtain maximum value while knowing how the vast majority of their competition has set their collective lineups. When Haskell entered a major contest on rival DFS platform FanDuel the same week, he promptly won $350,000 for his high finish. The timing of Haskell’s huge score was enough to spark allegations of “insider trading,” and while an independent arbitrator recently determined that Haskell entered his winning lineup about an hour before receiving the player ownership data in question, the cat was already well out of the bag.

In the weeks following Haskell’s data leak, mainstream media outlets spanning the spectrum from to the Washington Post have launched ongoing investigations into the DFS industry’s inner workings. It soon became apparent that many of the game’s biggest winners and most consistent performers were actually employees of DraftKings or FanDuel. Both sites were dogged by requests to open the proverbial books – or release information on recent winners to confirm that employees were not excelling at rates that were statistically improbable. Rather than acquiesce, DraftKings and FanDuel hunkered down initially, refusing to reveal the identities of winners from their major contests.

The idea that DFS tournaments are dominated by players with more skill and resources has long been accepted. But until this scandal erupted, suspicion that industry insiders might be using information not available to the public in an effort to gain an advantage and game the system remained just that. Now, DFS players who don’t work for the sites they frequent are forced to wonder whether the deck has been stacked against them.

As the story has continued to evolve, focus on DFS has intensified from all corners, including political figures in Congress who are calling for further regulation. A hearing has been scheduled for November, when Congressional members will discuss the industry’s rapid growth, and its contentious status as a game of skill rather than gambling. When the Unlawful Internet Gambling Enforcement Act (UIGEA) was authorized in 2006, banning online poker and casino gaming throughout America, the still nascent DFS industry was protected by a carve-out that ruled the fantasy sports to be a game of skill. That carve-out will likely be a point of discussion during November’s hearing, with Congressional leaders paying close attention to the ongoing rancor over insider activity.

For the poker playing population of America, people who have been left unable to play their favorite game online due to the UIGEA’s passage, hearings like the one to take place next month undoubtedly bring back bad memories. Before the attention of Congress was drawn to companies like PokerStars and Full Tilt, players could fire up an online tournament or cash game without a second thought. Once the government was through with its intervention into the online poker industry’s affairs, there was no more industry to speak of domestically. The arrival of “Black Friday” on April 15th, 2011 ended everything in an instant, leaving players in poker purgatory, unable to play, and in many cases, unable to even cash out their balances.

black-friday-headingIn the years since “Black Friday” tremendous progress has been made, and in fact online poker is now fully regulated in three states – Nevada, New Jersey, and Delaware. Several more states are currently considered legislation to regulate and tax online poker rooms, and many industry experts remain hopeful that federal legislation will eventually be passed to reverse the UIGEA’s ban. The tide has finally begun to turn, and today, online poker is well on the path back to respectability in the public eye.

Which is why poker’s ongoing association with DFS is a mistake.

Unchecked greed giving rise to insider scandals, suspicion that the game is rigged against the little guy; shameless advertising blitzes that make a risk seem like a sure thing – these are the regrettable consequences that come whenever a thriving industry is built on the back of bettors. Online poker’s two driving engines, PokerStars and Full Tilt, both succumbed to these temptations during the explosive growth and intense competition of their early rise. Unfortunately, DraftKings and FanDuel are repeating those mistakes, prioritizing profit over the protection of their player base, and practically daring the government to do something about it.

Tremendous effort has been made by a close-knit community of poker players, media figures, and industry leaders to legitimize their game – especially the form played online – to the masses. Daniel Negreanu and Jason Somerville have toured in tandem in the ambassador role, visiting places like California where online poker legislation is currently up for debate to help make that case. But even if the local business leaders and politicians they speak to are receptive, what happens when the see the DraftKings logo splashed across the screen 50 times during a WSOP segment?

The very voices poker wants to sway – elected officials on the local, state, and federal level – pay close attention to the front page of the New York Times, and Congressional hearings are sure to get their attention. What should be a clear choice to legalize, regulate, and tax online poker rooms in their jurisdiction can easily become muddled by the ongoing association between poker and DFS.

The personal motivation and political capital needed to approve online poker in individual states can only be diminished if the game becomes synonymous with DFS – an embattled industry heading down the same path of governmental intervention, and possibly outright prohibition, from which poker has only now managed to emerge.