Yes, you can win $1 million on those daily fantasy sports site, like one Minnesota man just recently did.
But stories about employees using what's essentially insider information to help their chances of winning on competitors' sites have now prompted regulators to take a closer look at the booming industry.
This is true even in Minnesota, where on Monday state Rep. Joe Atkins said in an email news release he plans to introduce a proposal that would clarify the laws about daily fantasy sports gaming in the state.
“This legislation has become necessary due to the sketchy rules, uncertain legality, and alleged scandals surrounding fantasy betting sites like FanDuel and DraftKings,” Atkins, a DFLer from Inver Grove Heights, said in the release.
This is highlighted, he argues, by the Minnesota man's huge winnings, which Atkins says shows "there are currently zero consumer protections for Minnesota participants."
His two goals:
- Recognize daily fantasy sports betting as a legal activity in Minnesota.
- Require any daily fantasy sports betting site that moves more than $50,000 a year to be licensed with the state – opening it up to background checks, reviews, and audits from the state's Department of Public Safety.
Atkins is the DFL Minority Lead on the House Committee on Commerce and Regulatory Reform, which is in charge of gambling issues.
Daily fantasy sports, as an industry, is expected to rake in $3.7 billion this year, the Los Angeles Times reports.
Few rules, regulations for the sites
The two most popular sites (which you could probably guess just based on how often you see their ads) are DraftKings and FanDuel. Fortune says the two make up 95 percent of their market – though it also notes neither are profitable.
Both give players a certain daily spending limit to "buy" players and create a team. The players expected to do well cost more – so the strategy comes with picking cheap players you think will do better than projections.
Sports gambling, of course, is illegal in most places. But these daily fantasy sports sites are considered a "game of skill," Business Insider explains – it's not chance-based, so it's not gambling, a decision made by lawmakers back in 2006, Wired reports.
Because of that, they face little regulation, Business Insider says.
But they're now facing what CNN calls a potential "crackdown," especially as casinos push lawmakers to apply standards and practices they face evenly across all forms of betting.
Meanwhile, DraftKings and FanDuel are dealing with the fallout of recent reports that employees would get information not accessible to most players – such as the percentage of teams using a certain player – and use it to compete on the other service – Forbes explains the details here.