Mike Francesa invited New York Assemblyman Dean Murray on his show to talk about Daily Fantasy Sports and in typical, rather entertaining Mike Francesa fashion, proceeded to shout over Murray for not agreeing with him.
Murray has been an outspoken defender of Daily Fantasy Sports, claiming they aren’t a form of a gambling and even sponsoring bills to protect these companies from the Attorney General’s claims that they are (a New York court will decide this week whether to allow daily fantasy sports companies to resume operations in the state, or uphold the AG’s opinion that the companies are operating illegally until a later court date). Francesa is clear that he thinks Daily Fantasy Sports is gambling, saying it should be regulated like betting on horse racing.
Francesa is trying to get after something important here, but he’s moving in the wrong direction.
Let’s start with a brief explanation of what the legal definition of gambling is: skill and luck exist on a spectrum. Everything you do in life will have elements of both skill and luck, but under law, gambling is classified as something that is more luck than skill. If the core trait of any game is random, dumb luck, that’s gambling. Everything else isn’t.
So, are daily fantasy sports luck-based gambling? No, they aren’t. How could they be?
Sports Business Journal adeptly pointed out over the summer that less than two percent of contestants have managed to capture more than 91 percent of the prize money during the first half of the last MLB season and 77 percent of overall profits, with an average 27 percent return on investment. These “numbers nerds with sophisticated algorithms,” as John Oliver called them recently, figured out that if they create an algorithm complex enough, they could game the system and skew the odds so they win more than they lose.
They are proof of why fantasy sports isn’t gambling. It’s a meritocracy.
Are there elements of luck? Like anything, of course there is. You may think that it’s going to rain even though the weatherman, with all his thousands of satellites and complicated radars at his disposal, says that there’s a 90 percent chance it won’t. It may rain, and your lucky guess may be proven correct, but it doesn’t then prove that the entire system of weather forecasting is a guessing game. You got lucky, but in the long run, the weatherman will always be more accurate.
It’s much the same in fantasy sports. You can’t luckily create a formula that makes you win more. You can’t happen upon a good algorithm in the street. You win fantasy sports consistently when you figure it out better than the people you’re playing against, and the better you figure it out, the more you’ll win.
Can you beat the system like that in luck-based gambling games? Not really. Sure you can count cards in blackjack, but making money doing that requires playing for long periods of time, losing small amounts of money every hand, then betting a huge amount on the tiny number of hands where you know the odds are in your favor. You can make money, but you’ll do it losing a lot more hands than you win. It’s the same in roulette, or craps. You can play perfectly, but because the game is more luck that skill, you can’t keep the odds in your favor for longer than a passing moment.
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You can in fantasy sports. It’s difficult, but do it right and you can win more than you lose — as the numbers nerds have proven. But that doesn’t mean it shouldn’t be prone to regulation, if that’s what you’re after (which Francesa clearly is).
Rather than accusing an industry of something it isn’t, you could say it needs regulating because it’s too skills-based, like the stock market. Your skills able to be enhanced by insider information; plutocracies able to be formed by the most skilled. Those skillful could in turn gain so much power that they turn the market too predatory. All of those are reasonable concerns, but adopting any one means first accepting that daily fantasy sports isn’t gambling.
So whether you like daily fantasy sports or not, Francesa should accept reality and not lobby to help kill an industry under false pretenses.
