Virginia shouldn’t impose fantasy sports restrictions
Following a lobbying push from industry giants, the Virginia attorney general’s office may soon act against some of the commonwealth’s favorite fantasy sports games.
In online gaming, industry leaders DraftKings and FanDuel were once celebrated for their disruptive influence in the sports betting industry. These pioneers played a key role in fighting for the legality of fantasy sports, which has allowed tens of thousands of Virginians to begin playing these contests in the last decade.
Today, however, both giants are spearheading a campaign to introduce new regulations on the industry’s marketplace newcomers. They want the government to categorize their fantasy sports competitors’ services as gambling rather than skill-based games.
Fantasy sports has historically been classified as a game of a skill, including in this commonwealth, because of the extensive knowledge of sports and their affiliated players required to do well in them. DraftKings and FanDuel, however, are now arguing that their competing fantasy sports companies should be classified as gambling. Such a classification will make them illegal in many states and far more costly to operate in others — benefiting DraftKings and FanDuel but harming consumers and marketplace competition.
Unfortunately, gaming commissions and attorneys general offices in several states have taken their bait, including Virginia’s, which recently issued an opinion suggesting that it may soon crack down on DraftKings and FanDuel’s competition.
There’s not much difference between DraftKings and FanDuel’s fantasy games and the fantasy games the two companies are going after. They both involve needing knowledge of multiple real-life players to do well. Nevertheless, this duopoly aims to safeguard their future profits by imposing burdensome gambling regulations on a new generation of fantasy sports games — regulations that DraftKings and FanDuel won’t have to follow.
Virginia can’t let this happen. Fantasy league sports, the fastest-growing sport in the United States, represent a multi-billion-dollar market. It’s in the commonwealth’s interest to welcome this revenue, not waste it.
Lack of competition translates into higher prices for Virginia’s consumers, benefiting no one but incumbent firms. Bans on fantasy sports platforms can also create illegal underground markets, providing opportunities for criminal elements to thrive while failing to address core issues.
Instead of limiting choices for sports fans, Virginia’s regulators should prioritize honest regulation and harm reduction, allowing an equal playing field among all potential providers — because incentivizing innovation leads to better quality and consumer prices.
It would also be wise for DraftKings and FanDuel — once champions of disruption — to consider the broader impact of their current advocacy. Their lobbying can set a precedent that allows casinos and their other rival interests to seek legislation and regulations that restrict all fantasy sports — not just the games of DraftKings and FanDuel’s competitors. These casino interests tried doing it once before in the commonwealth, and they can certainly try again. Virginia’s thought leaders must now advocate for consumer choice rather than corporate conglomerates rigging the system.
The Virginia attorney general’s potential action against the newer fantasy sports games, influenced by DraftKings and FanDuel’s lobbying efforts, is undermining a flourishing market that entertains and engages tens of thousands within the commonwealth. This move threatens to stifle innovation and competition in an industry celebrated for its reliance on skill and knowledge.
DraftKings and FanDuel’s push represents a crossroads for regulatory bodies in Virginia. It will challenge them to discern between genuine consumer protection and regulatory manipulation intended to serve the corporate interests of favored companies.
The current state leadership wants to bring more jobs and businesses into the commonwealth. Favoring government-selected favorites in the marketplace runs counter to this laudable goal.