Opinion: DFS Industry Should Stop Treating All Criticism the Same

If you’re following the current situation unfolding in the world of daily fantasy sports you’re probably astutely aware of the battle lines being drawn.

On one side are the DFS operators and industry and their ardent supporters. These people are decidedly pro-DFS and given their druthers wouldn’t change a thing. On the other side… well, that’s where it gets a bit trickier. The other side is not populated by anti-DFS folks, or people trying to prohibit the game… the other side is simply critical.

I fall into the latter group.

But, don’t mistake my criticisms for antipathy or even apathy. And don’t assume I get satisfaction out of the industry’s struggles. I want daily fantasy sports to not only survive, but to thrive. The reason I criticize the daily fantasy sports industry is simple, they are making, in my opinion, a number of mistakes, mainly brought on by hubris, and an utter disregard for anything that even remotely resembles criticism.

Trust is in short order in iGaming

Trust but verify is a good policy to have in place, but the DFS industry’s mantra (up until recently) was trust and there is no reason to verify. Those of us who come from an online poker background simply don’t accept that rationale. Nor do lawmakers and regulators when potentially billions of dollars are changing hands. Industries of this size, and of this type, demand some level of regulation.

Not to harm the industry, but to help it.

The current situation wasn’t hard to predict

Anyone with two eyes saw the current situation coming down the road. In December of 2014, not long after I first took an interest in DFS, I wrote a column titled, Legal Questions Remain for Daily Fantasy Sports, where I correctly guessed that state-level regulation of the industry was coming. I was familiar with DFS since it was touted as the next big thing in igaming, but had never looked into the industry very closely until last year. When I did I immediately saw some fundamental problems, and I wasn’t the only one who felt this way.

Attorney’s Marc Edelman and Daniel Wallach have been pounding the “is it really legal” drum for a number of years, and instead of listening to these concerns, their critiques were widely disregarded by the industry, with many labeling them haters, or having some kind of hidden agenda. When I asked a DFS supporter what my agenda was, he said he didn’t know, but he’d be keeping an eye on me – If you’re wondering, I have no agenda, beyond the fact that I play DFS, think it’s a good product, and would like it to be around for a while.

At the 2015 FSTA Winter Conference, Eilers Research’s Adam Krejcik, put forth 14 “bold” predictions about the DFS industry, one of which was that the DFS industry “will likely face one major PR fiasco.”

Krejcik listed the following examples, and I’ve bolded the one that have occurred:

  • Security / Data breach
  • Cheating scandal in a major GPP
  • Political attack
  • Payment refusal / Sob story
  • Rogue company pushes the legal boundaries (interestingly, DraftKings could be this “rogue” company)
  • Consumer litigation attack

This is why it was so disheartening to so many people that the industry seemed wholly unprepared for the fallout (if it wasn’t a data leak by Ethan Haskell it would have been something else) and while devoting massive amounts of money to marketing, the major DFS operators had done very little in the way of lobbying, presenting legal opinions, and implementing strong internal controls and consumer safeguards.

We all want the same thing

Instead of assuming critics are “jealous” as Jason Robins once said in a , and brushing aside these criticisms as gratuitous, the industry should have treated them as justified, even if they disagreed with the premise. Most of the critics had the industry’s best interest in mind. None of the legitimate critics were trying to tear the industry down, they simply saw flaws and potential pitfalls and spoke up.

I’ve made similar criticisms of the online poker industry, and you’d be hard-pressed to find people who consider me anti-operator – Privately operators gripe about some of my critiques, and publicly I usually get called a shill for these same sites by upset consumers.

The difference with DFS is the industry vents against its critics in public, and takes hardliner stances. Even after some of these concerns proved true,  the industry continued to downplay and even attack other critics.

When Chris Grove noted that he was still able to access a DraftKings account in Las Vegas, that was registered to a person in California. This same experiment did not work on FanDuel. Instead of seeing Grove’s allegation as the constructive criticism it was meant to be, and using it as a reason to better their geolocation technology and perhaps prevent future scandals, Grove was widely criticized by DFS supporters, and DraftKings statement was more or less dismissive of his claim.

Over a month later, following Massachusetts Attorney General Maura Healey’s calls for stricter geolocation and player verification protocols, DraftKings announced it had partnered with GeoComply – something they should have done when Grove first reported the basic flaw in their current geolocation protocols.

This is once again a signal that the company focused on growth and marketing above all else; they had the means to work with GeoComply (universally considered the gold standard in geolocation technology) but decided to wait until it was more or less forced upon them, when they could have preemptively taken this step.

Bottom line: Not all criticism is coming from a bad place. I also think DFS is worth playing, especially while overlays are still at hing.

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