Unsure Bet: The Future of Daily Fantasy Exchange Wagering

Abstract

Fueled by technological change, fantasy sports have enjoyed incredible growth in the twenty-first century. Since 1980, when writer Daniel Okrent explained his invention of ‘‘Rotisserie’’ major league baseball (MLB) to a few friends in an eponymous New York restaurant, fantasy sports has grown into a global business with over 35 million participants in North America alone. As originally designed by Okrent and those who followed, a fantasy sports participant acted as a ‘‘make believe’’ general manager who selected real MLB or National Football League (NFL) players for his or her fantasy roster, made trades and other roster moves during the season, determined success from the input statistics generated by real MLB or NFL players in real games, and competed for pride and relatively small cash prizes awarded on a one-time basis at the end of the season. Since the enactment of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) and the ‘‘fantasy sports’’ exemption contained therein, a new model of fantasy sports has emerged: the ‘‘daily fantasy sports league’’ or ‘‘daily league.’’ Instead of engaging in trades and other transactions over the course of a full MLB or NFL season, a daily league—such as www.fanduel.com (FanDuel) and www.starstreet.com (StarStreet)—involves selecting players and receiving a payout or winnings at the end of just one day. Unlike the traditional fantasy sports model, a daily league exhibits the hallmark element of almost all other regulated markets—daily market action. Since April 22, 2013, Atlantic City casinos have been authorized to offer daily leagues or partner with current providers such as FanDuel to offer daily leagues pursuant to regulations promulgated by the state’s Division of Gaming Enforcement on March 18, 2013. Notwithstanding weak arguments