NEW JERSEY — It’s a multi-billion dollar industry built completely on fantasy and speculation, but now, the online fantasy sports business is facing major new scrutiny, on a big day in sports speculation.
Nevada authorities have now forced the industry’s websites to cease operation in the state until they get gambling licenses. The news comes on the same day that the online sites faced tougher scrutiny from New York State’s top lawyer, and New Jersey got a big step closer to having sports gambling legalized. Betting on sports match outcomes — which is gambling — and creating fantasy teams and leagues online — whose biggest facilitators insist is not gambling — are both definitely one thing: big business. The Garden State wants as big a piece of the industry’s $400 billion in bets as it can get, in tax revenue.
“It’s a bonanza for our tourism,” said New Jersey State Senator Raymond Lesniak, a Democrat from Elizabeth. “We’re on the road to getting it done.”
Lesniak is the leading proponent of legalized gambling in New Jersey. He was reacting to the fact that a federal court that had rejected sports gambling in New Jersey in the past has decided to re-hear the case.
“I’m hoping that we can get sports betting by the Super Bowl,” the senator said to PIX11 News in a phone interview from France. He added that if the court doesn’t decide on the case before February is over, he’s confident that “as a consolation, [by] March Madness” gambling on sports contests will be legal at New Jersey’s casinos and racetracks.
“I’m sure there’s some politics behind it,” said former prosecutor Julie Rendelman about the highly unprecedented decision by the federal court to re-hear New Jersey’s petition. “Fantasy football has promulgated them to do more and rethink their decision,” she said.
Her comment mentioned another key aspect of recent developments in sports speculation. Daily Fantasy Sports, or DFS, is business so big that some sports team owners have bought into online sites.
However, after employees at the two biggest online sites, Fan Duel and Draft Kings, got six-figure payouts from playing online themselves, New York Attorney General Eric Schneiderman demanded that on Thursday those companies present detailed information about who at their firms has access to insider information. Also, now, the FBI is investigating the two companies.
The firms have said that they have now implemented policies prohibiting employees from participating in DFS activities.