The NFL, Congress and the Future of Fantasy Football

The NFL favors fantasy footballIn case you haven’t turned on your TV lately or don’t have cable or satellite, there’s a new nuisance in advertising. Online fantasy sports “leagues” are taking over the airwaves, twenty second spots at a time. Almost every network showing any programming that might be of interest to men is rife with commercials from Draft Kings and Fan Duel, both touting their big prize money and showing someone (usually at a sports bar) winning the whole enchilada…at least for that week’s big contest.

Because of an exemption to the online betting laws put in place by congress in 2006, fantasy sports are not considered a game of chance. And yet, poker is. Never mind that Daniel Negraneu, Scotty Nguyen or heck, even legendary cocaine addict Stu Unger have all won multiple poker championships (among others). Apparently those players must be extraordinarily lucky since poker is illegal outside of legal gambling establishments. Oh, you can play poker online just as easily as fantasy football, but you’ll be playing on a site set up by an offshore entity.

So what’s really going on here?

When fantasy sports was in its infancy, it was more of a “bragging rights” thing to do between friends and co-workers. Something to talk about at the water cooler. Sure, some leagues would vote in an entry fee and bets were certainly made, but it wasn’t a major source of revenue for most league organizers. Initially, most leagues had participants (a.k.a. “owners”) picking a team for the entire season and some leagues didn’t allow trades or even replacements due to injury. That was part of the fun. You made choices early and hoped they would prove to be the right choices as the season wore on.

But small time spreadsheet leagues have given way to online leagues, where even small bets or entry fees over millions of players adds up to big money. And absolutely none of those profits (or winnings) are going to the NFL. So why does the NFL support fantasy leagues?

It’s a simple matter of viewership. Though the fortunes of a particular team may tank by midseason, the NFL still wants its viewers to watch that team’s games. But where the casual fan will lose interest when he or she knows a playoff berth is hopeless, fantasy league owners won’t. That’s because even bad teams have good players capable of having a great game. If there’s money on the line, fantasy owners want to know in real time how their picks are panning out. A single stud player might make the difference between winning and losing.

That’s great for the NFL. Television contracts are the NFL’s main source of revenue and represent tens of millions of dollars. Propping the ratings up keeps the networks happy and ensures a bidding war every time television contracts are renewed. The NFL wants home viewer asses in the seats, so to speak, and doesn’t care how they get there.

But Congress should (and probably will). What likely was intended as a way to avoid the passing of a law that would make office betting pools illegal in 2006 has become a major loophole today. And while any lawmaker who proposes to either make fantasy betting illegal (or more wisely, tax it) might be unpopular, it’s all but guaranteed to happen. That’s because the US government has never been one to shy away from regulating consumer spending habits. While a multinational corporation can get away with paying little or no taxes, people who profit from vices like gambling can’t – at least for long.

That’s because gamblers don’t have a lobby.

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