Taylor: Fantasy sports, online gambling a disturbing combination

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In the interest of exploring the world of not-yet-legal online sports betting in Texas, I loaded $20 into a new DraftKings account in February. I considered it an investment in me being your Hunter S. Thompson-style immersive gonzo journalism guide to this bewildering online world.

Don’t worry, it wasn’t that exciting.

The original business proposition of online gambling sites DraftKings and FanDuel was to enable fans to create online fantasy sports competitions. In fantasy sports, participants create virtual teams in a sport and draft players whose performance in real games is converted to points for their fantasy team owners, who are competing against other owners for a game or a season.

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You can do this for bragging rights or for money.

DraftKings and FanDuel improved upon the analog world by enabling fans to play on their phones against friends or strangers, at any moment of the day, and to win money. This is already legal in Texas and most other states, except a few in the Northwest and Nevada.

One legal fig leaf for this proposition was that fantasy sports betting is a game of skill as opposed to a game of chance, like pure casino gambling. In 2018, the Supreme Court ruling in Murphy v. NCAA opened the country to legal sports betting nationwide. The fantasy sports companies moved aggressively into regular online sports betting — they didn’t need the legal fig leaf anymore.

Michael Taylor took a spin on DraftKings, where he found its online fantasy sports platform confusing and its online sports betting side “degenerate.”

Scott Olson, Staff / Getty Images

Fantasy sports betting

In Texas, where sports betting is not legal, you can still bet money on fantasy sports via DraftKings. Because I loaded $20 into my account on that platform, the app awarded me two free tickets, nominally worth $20 each, to try my hand at fantasy sports before risking my own money.

I spent the past week trying to figure out how to do this. It was surprisingly hard to actually use my free tickets but I finally got the hang of it in the past few days. The fantasy sports payouts depend on the number of players you compete against. Winning a four-player fantasy game with a $20 entry would earn you $54. Winning a $10 entry game with 11 players would earn you $100. You can immediately see the site’s potential for profit from each fantasy game it facilitates.

At least a half-dozen times in early March I tried to spend my free $20 tickets building fantasy lineups only to have my ticket returned when an insufficient number of other players joined my game. I tried tennis, European soccer, NHL, NBA and XFL — San Antonio vs. Houston — all with no luck finding opponents.

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Finally, I managed to enter a four-person soccer draft and a three-person hockey draft, finishing last in both. In my defense, I know nothing about those sports. I’d never heard of any of the players and I was desperate to use my free tickets just to see the results.

Weirdly, the site awarded me a bonus $1 for my participation, although I can’t actually take it out of the system. I will be sure to fantasy gamble that away soon, as well. So that’s the fantasy side of these sites, where plenty of real money can be lost or, I suppose, won.

Overall, this fantasy sports betting thing held zero appeal to me.

FanDuel is among the online sports betting platforms urging Texas to legalize online sports gambling.

FanDuel is among the online sports betting platforms urging Texas to legalize online sports gambling.

Scott Olson, Staff / Getty Images

Online sports gambling

The real side of the action, and the side the Texas Legislature will consider this spring, is whether to legalize regular online sports betting, which is allowed in most other states.

DraftKings did a good job blocking me from its gambling side by noting my location. But I could access and see what it offers for pretty much every professional game.

I figured gambling would involve traditional bets, like picking the winner of a game or picking a team versus a point spread. It was a lot more than that.

The word that kept coming to mind was “degenerate.”

While I watched a live NBA game — Celtics vs. Cavaliers on March 1 — on TV at a restaurant, I had options at every moment of the game to bet on various in-game outcomes:

  • Which player would score next?
  • Which team would score next?
  • Would the next points be on a two-point play, a three-point play or a foul shot?

That’s in addition to numerous overall game outcomes:

  • How many points would former Spur Derrick White score for the Celtics, with an over-under line of 10.5?
  • How many points would I predict any player would score?

At any moment of the game. Wow.

This is gambling for people with attention spans of 10 seconds or less. The app continuously refreshed the odds and betting options live on my phone as the play developed — every play. This is a brave new world of unlimited sports gambling stimulation.

I’d never gambled on sports before, aside from picking a square once on a 10-by-10 grid in the office Super Bowl pool or randomly filling out an NCAA March Madness bracket from a position of extreme ignorance. So this is not really a risky attraction for me. But as a psychologically sophisticated method of capturing the attention of people who are susceptible to gambling addiction, this is some powerful stuff that DraftKings is pushing.

Depending on how you measure it, problematic gambling or gambling pathology affects from 1 to 5 percent of the population.

This felt like heroin for the gambling degenerate. A gambler and his money will soon be separated.

People who favor legalized sports gambling argue that consumers will find a way to gamble — whether through gray markets or criminal bookies — and that states should legalize, professionalize and tax the activity while keeping customers safe.

Normally, I’m pretty permissive about vices, preferring to heavily tax and strictly regulate rather than outright ban them. But man, sports gambling on a mobile app was scarier than I expected. There will be millions — probably mostly young men who love sports — financially ruined by this.

Michael Taylor is author of “The Financial Rules for New College Graduates” and host of the podcast “No Hill for a Climber.”
michael@michaelthesmartmoney.com | twitter.com/michael_taylor

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