Witness List Set For Fantasy Sports/Sports Betting Congressional Hearing: FanDuel, DraftKings, Sports Leagues Run Away & Decline Invite

HacheMan · May 8, 2016

Witness List Set For Fantasy Sports Congressional Hearing; No FanDuel Or DraftKings

Most of the witness list for a Congressional hearing looking into the daily fantasy sports industry is now set.
DraftKings and FanDuel representatives were invited to attend but declined, according to a source close to the House Energy and Commerce committee.
Here are the witnesses scheduled to appear in front of the House Subcommittee on Commerce, Manufacturing, and Trade:

Steve Brubaker, Executive Director, Small Business Fantasy Sports Trade Association;
Kurt Eggert, Professor of Law, Chapman University Fowler School of Law;
Jordan Gnat, Senior Vice President, Strategic Business Development, Scientific Games;
John M. McManus, Executive Vice President, General Counsel and Secretary, MGM Resorts International;
Ryan Rodenberg, Assistant Professor, Department of Sport Management, Florida State University;
Peter Schoenke, President, Rotowire.com, Chairman, Fantasy Sports Trade Association;
Lindsay Slader, Operations Manager, GeoComply;
Mark Locke, CEO, Genius Sports

Who else isn’t in the DFS hearing?

While the absence of DraftKings or FanDuel reps is glaring, the hearing will also miss the presence of the professional sports leagues that partner with the two sites, according to ESPN’s David Purdum:

David Payne Purdum
✔‎@DavidPurdum

FanDuel, DraftKings, NFL, NBA, MLB and NHL were invited to testify at Congressional hearing on daily fantasy. All declined, per source.
5:34 PM - 6 May 2016

A closer look at the witnesses

Who are the witnesses, and why are they appearing in front of Congress on this topic? From Purdum via Twitter and from the composition of the witness list, sports betting will also be a topic of discussion.
Brubaker is a lobbyist based in Illinois who heads a trade association representing several dozen “smaller” fantasy sports companies — i.e. not DraftKings or FanDuel. The SBFSTA launched in March. He will speak on behalf of the small DFS operators, paid-entry seasonlong contest operators and content sites under the SBFSTA unbrella.
Schoenke is the other industry representative on the witness list. He has spoken in front of a variety of state legislatures on behalf of the companies that the FSTA represents. The FSTA counts nearly all DFS operators among its membership — that includes DraftKings and FanDuel.
Rodenberg is one of the foremost experts on federal law as it pertains to sports wagering; he has written an amicus brief in the ongoing New Jersey sports betting case. He will likely be consulted for his expertise on the applicable federal laws, namely UIGEA and PASPA.
Eggert is a an expert in gambling regulation. His publication — Truth in Gaming: Toward Consumer Protection in the Gambling Industry — is likely why he got the call for this hearing.
Gnat represents Scientific Games, a leader in technology for lotteries and land-based and interactive gaming; SG is also involved sports betting. Gnat appears to be called for his expertise in the realm of internet gaming.
McManus will be representing the land-based casino industry in the hearing. Casinos have generally supported the idea of regulation of the DFS industry (via the American Gaming Association). Casinos have lamented that DFS falls in a legal gray area in many states; they have been loathe to enter the DFS space, because of the possibility of putting their gaming licenses at risk. Casinos and the AGA are also supportive of legal and regulated sports betting throughout the U.S.
Slader represents GeoComply, which provides geolocation services in the online gaming space. DraftKings partnered with GeoComply in November of last year. GeoComply is capable of stopping users from entering DFS contests if they are in a location where contests are illegal.
Locke represents Genius Sports, a sports data and technology company that works with leagues around the world on game integrity issues as it relates to sports betting.

HacheMan · May 8, 2016

Daniel Wallach ‏@WALLACHLEGAL <small class="time" style="font-size: 13px; color: rgb(136, 153, 166); margin-right: 5px;"> May 6</small>
Good sign for sports betting at next week's hearing: most witnesses have gambling expertise & MGM's McManus a big backer of sports betting.

TheComputerGroup · May 8, 2016

Hurry up & get it done! Hollywood casino are getting ready to take bets when it passes!

HacheMan · May 9, 2016

Silence by lead characters in fantasy sports industry is deafening

http://www.nydailynews.com/authors?author=Evan-Grossman

The NFL would rather talk about concussions than testify about the legality of daily fantasy sports.

Exploring whether the federal government should have a role in regulating the fantasy sports industry, Congress is holding its first hearing on the topic this week and invited industry giants DraftKings, FanDuel and the professional sports leagues — the NFL, NBA, NHL and MLB — that have invested and partnered with them.

All of them declined.

In March, Jeff Miller, the NFL's senior vice president for health and safety testified before the House Committee on Energy and Commerce that there is a direct link between football and CTE.

Guess who's running Wednesday's hearing on fantasy sports?

The House Committee on Energy and Commerce.

The NFL did not respond to a request for comment and the league will be a no-show this week along with other critical fantasy sports figures, leaving a gaping hole in what lawmakers will actually learn about the industry. That looks weak. It looks like they are scared about congressional lawmakers entering the conversation about how the fantasy sports industry should be regulated.
"An invitation to participate in a congressional hearing is about as voluntary as an invitation to participate in an NFL mini-camp," Daniel Wallach, a sports attorney and shareholder at Becker & Poliakoff shareholder, told the Daily News. "You're not required to attend, but it's not exactly good form to stay away. They're not legally compelled to be there, but it does look bad.

"If you're going to have a hearing on fantasy sports and sports betting, you absolutely have to have the four professional sports leagues, the NCAA, DraftKings and FanDuel present," he said. "A hearing without one or two of those participants would be a head-scratcher. To have none of them there is unthinkable and appears to be designed to make this issue go away rather than to engage in a substantive conversation aimed at creating some momentum."

DraftKings and FanDuel both said in statements to the Daily News they are content having the Fantasy Sports Trade Association speak for the industry Wednesday. They are both members of the organization, which has lobbied hard at the state level for DFS-friendly legislation.

At the federal level, the sites have not lobbied as aggressively. While they have reportedly spent upward of $10 million on state-level lobbying over the last year, the sites combined to spend just $130,000 on federal lobbying this year. DraftKings paid $80,000 to Morgan, Lewis & Bockius and FanDuel paid Steptoe & Johnson, another federal lobbying firm, $50,000 so far this year, according to funding watchdog OpenSecrets.com.

There's a reason the sites want the DFS battle waged at the state level.

"The states that have proposed bills have essentially rubber stamped legislation that's been championed by DraftKings and FanDuel and their lobbyists," Wallach said. "Congress would not necessarily be as pliable."

What seems to have scared away the leagues is the issue of sports gambling hanging over anything that has to do with fantasy sports. It's impossible to separate DFS from traditional sports betting, though the DFS sites have tried by arguing their games are contests of skill, rather than games of luck. But anyone who's ever played a fantasy game knows that once their lineups lock, the outcomes of the games are out of their hands.

Sports gambling will be discussed Wednesday. Rep. Frank Pallone, D-NJ, who is a member of the committee, wants to legalize sports betting in the Garden State and has been calling for this hearing since last year, has been vocal in calling out leagues for their hypocritical position on fantasy games.

"What it has essentially done is carve out a way for the leagues and teams to do sports betting or gambling where they are the only ones that make any money," Pallone said last year.

According to reports, the NFL has been trying to stop a congressional hearing on DFS since last year.
Pallone supports legalized sports gambling, but he's called DFS operators' desire to avoid being labeled gambling sites a "charade."

"Let's take this out of the shadows," Pallone has said. "Because of the advertising — millions of dollars have been spent — you're starting to get a light shined on it, and you're starting to see the problems occurring because of the lack of regulation."
With a chance to answer questions about their business models, DraftKings and FanDuel declined to appear before Pallone's committee. With a chance to talk about their investments and partnerships with the sites, the leagues also declined.
Pallone wants to legalize it all. Yet the lead characters in the fantasy sports industry declined to have a dialogue about it.
And their silence is deafening.

HacheMan · May 9, 2016

This is Frank Pallone's original letter asking Congress to take a deeper look into Fantasy Sports & it's legality as it is virtually the same as sports betting, which has brought us to this meeting Wednesday...

https://democrats-energycommerce.ho...hearing request Fantasy Sport Sept14.2015.pdf

HacheMan · May 10, 2016

Congressional subcommittee examining daily fantasy

David PurdumESPN Staff Writer

A congressional subcommittee will examine the daily fantasy sports industry during a Wednesday hearing in Washington, D.C., that could lead to further discussion on sports-betting laws in the United States.
The House Subcommittee on Commerce, Manufacturing and Trade will hold a hearing titled "Daily Fantasy Sports: Issues and Perspectives" at 10:15 a.m. ET Wednesday at the Rayburn House Office Building. It is an informational hearing that will focus on the legal controversies surrounding daily fantasy sports, the key consumer-protection issues and whether federal oversight is needed. A committee source and published statements from witnesses indicate that a broader look at the prohibition of traditional sports betting and online gambling laws also will be part of the discussion.

The two largest daily fantasy operators, FanDuel and DraftKings, and the professional sports leagues invested in them chose not to attend Wednesday's hearing. FanDuel and DraftKings were sent official written invitations from the committee. Both elected not to send company officials and instead will allow the Fantasy Sports Trade Association to represent them.

It's not uncommon for companies to send trade associations as representation in initial congressional hearings, but the absence of the leading DFS operators is notable. Just two months ago, FanDuel CEO Nigel Eccles and DraftKings CEO Jason Robins testified in front of the Gaming Policy Committee of the Nevada Gaming Control Board, but they are not expected to attend Wednesday.
FanDuel and DraftKings said they are comfortable being represented by the FSTA and look forward to working with leaders at the state and federal levels as the discussions continue. FSTA president Peter Schoenke and Steve Brubaker, executive director of the Small Business Fantasy Sports Trade Association, will represent the industry.

The NFL, NBA, NHL and MLB also were invited to testify but declined. The NBA has equity in FanDuel, and commissioner Adam Silver has called for Congress to "adopt a legal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards."

The NBA did not respond to multiple emails inquiring about the hearing.
The NHL and MLB have equity in DraftKings. The NFL does not have any deals with FanDuel or DraftKings at the league level, but 28 of 32 teams have sponsorship or marketing agreements with the companies, and New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones have equity in DraftKings.

DraftKings and FanDuel are in a tense legal battle with New York Attorney General Eric Schneiderman and are not operating in the Empire State in addition to several other states. Nine state attorneys general have joined Schneiderman in declaring that daily fantasy sports violate state gambling statutes.

Other states, though, are attempting to legalize daily fantasy. Indiana, Tennessee and Virginia have passed legislation clarifying the legality, and more than 20 states are considering bills. Massachusetts has implemented extensive regulations.

U.S. Rep. Frank Pallone, a Democrat from New Jersey and the ranking member on the House committee, requested the hearing in September, after a barrage of daily fantasy advertising hit the airwaves and FanDuel and DraftKings came under fire for allowing employees to compete in cash games on other sites. He sent a letter to the Federal Trade Commission in November, stating that any investigation into daily fantasy sports should include professional sports leagues. Pallone also has introduced a bill to amend the federal prohibition on sports betting, known as the Professional and Amateur Sports Protection Act of 1992 (PASPA). The bill has not gained much traction, though.

PASPA prohibits state-sponsored sports betting in all but a few states, most notably Nevada. However, Americans are betting on sports more than ever, primarily online with illegal offshore sportsbooks and independent local bookmakers. The American Gaming Association estimates that Americans wagered $149 billion on sports in 2015, with only $4.2 billion bet at Nevada's regulated sportsbooks.

By comparison, daily fantasy industry generated $3.4 billion in entry fees in 2015, according to research firm Eilers & Krejcik Gaming, and an estimated 56.8 million people participated in fantasy sports in the U.S. and Canada.
Wednesday's hearing will be streamed live on the committee's website.

HacheMan · May 11, 2016

[h=1]DraftKings, FanDuel criticized for skipping hearing[/h]Lawmakers on Wednesday morning expressed disappointment that the daily fantasy sports operators DraftKings and FanDuel skipped a hearing on their industry.
House Energy and Commerce Committee ranking member Rep. Frank Pallone Jr. (D-N.J.) said he was not pleased that the two major operators in the daily fantasy space had opted not to testify.

“While I’m disappointed that some of the real actors in this space, like FanDuel and DraftKings, refused to participate today, I still believe that this hearing will be a good beginning to our efforts to level the playing field between daily fantasy sports, traditional sports betting and gaming,” he said.
The ranking member of the subcommittee echoed Pallone.
“I’m disappointed that the companies most central to this discussion are not here today to answer these questions,” said Rep. Jan Schakowsky (D-Ill.).
The comments came at the top of the first-ever hearing on daily fantasy sports, which allow players to draft virtual teams of real-life players on a daily or weekly basis for cash prizes. The industry is being represented before the panel by the leaders of two trade associations.

"We greatly respect the committee’s desire to learn more about fantasy sports," said FanDuel in a statement earlier this week. "FanDuel is a member of the Fantasy Sports Trade Association, a representative of which has offered to testify at the hearing and can comprehensively answer any questions about our industry."
Critics, including Pallone, say that the daily fantasy games constitute illegal gaming. The companies counter that they offer games of skill, rather than chance, and therefore shouldn’t be subject to gambling regulations.
State regulators and lawmakers have spent recent months developing new rules for the industry. Some states have legalized and regulated the games, while others have restricted access to the services.