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Comment by icelancer | Hacker News Reader

As someone who worked in the Internet gambling industry and has to sit and see these Daily Fantasy Sports idiots run their loophole into the ground, I can only laugh. You can't flout your "legality" in front of a bunch of US Senators, advertise fraudulent returns, and have zero regulations and expect to get away with it.

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I used to think this exactly...but now, given how heavily the NFL, NFLPA, and individual teams have been promoting Draftkings/FanDuel, it's obvious that the business model involves paying kickbacks to all the important stakeholders in the sport.

And regarding how relatively chummy the NFL is with elected officials, don't forget that commissioner Roger Goddell's father was both a senator and representative from NY state. That's just one data point, but there are probably a lot of backroom conversations that we don't know about. I think there's too much legitimate money at stake for there to be a online poker-like, "Black Friday" type event for the daily fantasy scam.

I agree, but to be fair, the NFL has long known that a huge driver of its popularity is gambling related.

This is true, but major leagues have a hostile relationship with sportsbooks in Nevada since the latter keep all the vig, rather than share it with the respective leagues.

It appears the DFS executives are paying the right people, whether in broadcasting, sports leagues and/or lawmakers.

You're right, the leagues aren't huge fans of sportsbooks, but that's only the official gambling that is going on. There's at least twice as much happening offshore and unofficially.

Jerry Jones and Bob Kraft are both investors in Draft Kings

As are Fox, MLB, NHL, and MLS.

Draftkings have been running ads heavily on Saturdays for college football. I think it's more than ESPN; I remember seeing the commercials on CBS as well.

Has been featured in the recent episodes of The League on FX as well.

Anyone that wants DFS to go away is almost certainly going to wind up disappointed. Unlike sports gambling, all of the major sports leagues have bought in and decided that this is going to be a major portion of their revenue. DraftKings and FanDuel, in conjunction with the NFL et al will use lobbyists to help draft legislation that makes everything appear kosher while blocking future competition. There is simply too much money to be made, and donated to reelection campaigns and PACs, for DFS to be legislated out of existence.

Exploit loopholes and break rules until you're big enough to block others from following in your footsteps. That seems to be how true Internet empires are built. It worked for Facebook, whose massive growth was fueled by deals with large email providers that gave their spammy friend invites a 100% inbox rate. It's not hard to get a billion users when the average new user is (in many cases unknowingly) spamming 500 or more people with an email invite to the site.

  It worked for Facebook, whose massive growth was fueled 
  by deals with large email providers that gave their 
  spammy friend invites a 100% inbox rate.

Could you elaborate on this or cite sources?

Genuinely curious.

I read about this in The Facebook Effect, a book by David Kirkpatrick. You can actually read the passage here [1] (beginning at the bottom paragraph of page 241). Basically, Hotmail was blocking friend invites from Facebook altogether on some days, and on those days growth would drop by 70%. So, they cut a deal with Microsoft to unblock them. It stands to reason that they did this with at least some other providers as well, although at the time Hotmail was by far the most important roadblock that they successfully removed.

[1] https://books.google.com/books?id=RRUkLhyGZVgC&pg=PA241&lpg=...

Daily Fantasy Sports probably wont go the way of poker for a couple of reasons:

1. DraftKings and FanDual are US based companies, most of the big poker sites were not.

2. There is an exception for fantasy sports in the Unlawful Internet Gambling Enforcement Act. You can debate whether Daily Fantasy Sports should qualify, but unlike poker it is at least starting on legal ground.

3. Daily Fantasy Sports has buyins from the NFL, NFLPA, individual teams, ESPN, the major broadcast networks, etc. Lots of peoples' hands have been greased from all of the money DraftKings and FanDual have been spending on promotion.

Another reason is that playing DraftKings or FanDuel does actually make watching football more interesting- you care about games you otherwise wouldn't care about. Many people will happily continue to lose $10/week for the benefit of enjoying watching the NFL more.

Online poker isn't as fun when you're consistently losing money- there's no "outside" benefit.

Putting $100 on a specific football match at 1.5% rake is both more fun and more profitable than DraftKings/FanDuel.

Difference is: entering a DFS lineup makes you care about most of the games.

By that rationale online sports books should be legal in the US (hint: they should)

Moreover, online gambling will be legalized within the decade. It is already legal in NJ and NV.

The only reason why we banned online gambling was banned was because of Sheldon Adelson's lobbying, not because of some inherent moral corruption.

Yeah but the regulations around how it is legal is quite bullshit: in order for online gambling to be legal the entirety of your server infra must be within the state lines of either NJ or NV.

So you can't host shit in U.S.-east or us-west and serve online gambling stuff from there.

However if all your betting business is international, you can host in any aws region...

Basically all online gambling regulations are just as lame and corrupt as they've always been.

Yeah, there's no scare-quotes "legality" here, it's quite explicitly and and intentionally spelled out as legal. It's not some clever interpretation, it's what the law says.

It's pretty obvious this was a planned process.

A sobering reminder of the disproportionate power of professional sports leagues. MLB antitrust exemption, anyone?

(disclaimer: I love MLB, but c'mon).

There's also the fact that it seems extremely likely that gambling laws will continue to be relaxed, continuing to reduce their risk.

Fanduel is Scottish

Their engineering is in Edinburgh, and the sales & marketing is in New York (and much larger).

It came out of Scottish enterprise funding and is run by Brits, ergo, it's Scottish in origin but based in New York.

FanDuel is a Scottish company.

having a relative who used to work in the TV industry decades ago when games were taped all I can say is, insider information has always driven betting

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