June 1st 2016: Fantasy sports leagues represent a fascinating intersection of two popular North American industries: professional sports and online/in person gambling. The popularity of fantasy leagues has led to mammoth revenue on online fantasy sports sites, so far exempt from the U.S. Unlawful Internet Gambling Enforcement Act of 2006. But what does it all mean for online gambling – and for sports lovers?
Fantasy sports betting is even more of an industry than most people realize. Consider these numbers via the Fantasy Sports Trade Association:
- The number of fantasy sports players has more than tripled in the U.S. and Canada, from 15.2 million in 2003 to 56.8 million in 2015
- Fifty-seven percent of fantasy sports players are college graduates, and 66 percent have full time jobs
- Sixty percent of fantasy sports players pay a league fee
- The average yearly spending on fantasy sports leagues and betting is $465 USD
- In 1988, an estimate 500,000 people played fantasy sports; in 2015, that number was 56.8 million
- The most popular fantasy sports game is American football with 73 percent of the market share
The ease of playing fantasy sports, either online at home/in the office or on a mobile device, has raised the sheer number of players, along with the amount of time and money they invest in their fantasy league play.
But…is it Gambling?
Critics of online fantasy sports say that the industry is basically like one large, connected sports book that is no different from the sports betting that takes place in person in casinos around the world. Proponents of fantasy sports may not argue the semantics of gambling (at least not for the fantasy players who put in money without knowing what they may receive in return) but they do insist that fantasy sports are much more strategic and entertaining than other types of sports betting. Just like playing poker or blackjack, fantasy sports requires skills and knowledge to come out ahead.
The Fantasy Sports Trade Association stands by supporters of the industry, citing survey responses that list enhancing sports knowledge and socializing with friends as the top reasons people participate in the fantasy leagues, both in person and online. The money is just one piece of the exciting puzzle and not the sole, or even primary, reason for participation.
In a nutshell, fantasy sports betting is more fulfilling for the players because there is a real-world connection and a longer-term commitment than one play or one score or one game. Fantasy sports players are engaging in more than blindly putting down money; from the drafting of players to the championship games, fantasy sports players are invested in ways that go beyond money alone.
This isn’t to say that fantasy players can’t have shorter-term commitments. The current online draft fantasy sports industry offers opportunities for players to win on a week to week, or even day to day, basis. There are tiered contests, like those found in poker tournaments, and opportunities to make above and beyond the flat winning fee.
As for traditional sports betting venues, like those casino sports books mentioned earlier? Online fantasy sports betting does not seem to be harming revenue. In 2014, $1.75 billion was wagered on football and $3.9 billion on sports overall in sports book settings – more than double the revenue in 2002.
Written by Kate Jones, posted on May 15, 2016