Last month, a landmark Supreme Court ruling paved the way for legalized Sports Betting by casting away a federal law which had prohibited placing legal bets in most of the country. Us degenerates jumped for joy! No longer would we be relegated to the dark, seedy depths of a casino, OTB or online sports books. The May 14th legislation now put the decision in the hands of states. Well, those that didn’t already have legalization grandfathered from before the PASPA (Professional and Amateur Sports Protection Act, now defunct). Through state legislatures, the count for permissible states now lies at six, but over the course of the next several months, we can see this number rise to as many as 23 once each respective state establishes regulations. If New Jersey’s first day turnout for legalized sports betting indicated anything, a huge conglomerate will be rushing betting windows and downloading betting apps.

The first question springing to this author’s mind is “What does this mean for Daily Fantasy Sports?”

No big surprise New Jersey jumped on board immediately, being the state who initially brought this case before the Supreme Court on Dec 4, 2017. Gov. Phil Murphy signed a bill passed by the State Legislature that formally legalized wagering.

One of the first major events to wager on in NJ has been the FIFA World Cup. Bets laid on the quadrennial international football tournament have hit an all-time high. For many reasons, “FIFA continues to win!”

Fifa continues to win.. #worldcup2018 #worldcup #fifaworldcup #Worldstar

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New Jersey is a focal point here for many reasons: 1) The state began the movement; 2) Besides Nevada (specifically Las Vegas), when you think of betting on sports, you think NJ; 3) I happen to live in the Garden State. I never have been a huge gambler on sports. Certainly not a boy scout, but the illegality did always turn me away. Contests demanding more skill always drew my interests.

Enter Fantasy Sports.

Constructing teams of random athletes to pit against your foes for the ultimate victory – a Fantasy Championship – is the quest of millions of Americans. Whether it be in seasonal leagues or such DFS leagues as DraftKings or FanDuel, an opportunity is present to flex your sports knowledge, manage a roster, and through DK & FD, win mass amounts of money just like the gamblers. Now the two worlds of sports gambling and DFS have often intersected; never more so than a recent foreseeable outcome. It’s just good business by DK to align itself with sports betting, allowing gamblers to simply log into their account on their smartphone, laptop or tablet to “Place Yer Bets!” Following suit, FD CEO Matt King told Term Sheet,

“We have exciting ideas from a game features standpoint that we will embed into our current experience. What users will see is a simple integrated experience in our core app.”

Will this union bring along negative stereotypes of gambling that won’t be as “quick” to shake as the PASPA (existed 25+ years after all)? Or will it take the world of DFS to even greater heights? Let’s examine the Pros and Cons.

Positives of Legal Sports Betting on Daily Fantasy Sports
DFS leagues are often flooded with gamblers who utilize game theory and algorithms to win GPP (Guaranteed Prize Pool) tournaments and Cash Games. With the passing of legalized sports betting, we could see a decrease in such DFS players as they migrate to direct wagering, freeing up the standings for authentic fantasy sports players.

Easier paths to cashing places by a decrease in player pools (if the above trend comes to fruition).

With DK (and one would think FD will not be far behind) aligning itself with sports betting locations such as Resorts Casino Hotel, the “rake” or amount of money these organizations set aside for the price of business will increase exponentially with the exposure to sports wagers. The amount, per se, won’t increase, just the exposure. Thus DFSers may see the amount for rakes decrease, allowing for larger take-homes.

As any avid Daily Fantasy Sports player will attest, paying attention to betting lines, favorites, dogs, expected score and over-unders is crucial for formulating winning lineups. With sports waging more abundant and in the limelight, this information will be more readily available and will likely expand in both detail and precision… Can’t you just smell the rise of your balances?
Annually, illegal sports betting amounts to an approximately $150 billion industry. The decision to now legalize has doubled the value of Tusk Ventures’ equity stake in FanDuel. This could result in larger prize pools and more cash placings.

Negatives of Legal Sports Betting on Daily Fantasy Sports

With the masses flocking towards placing bets on professional and collegiate sports, we may indeed see the aforementioned decrease in player pools, but what if they drop too low? Prize pools could also correlatively decrease, making GPPs far less profitable.

Much profit will be had in the sports betting realm for DK and FD. Yet, this expansion may spread the back end infrastructure too thin, causing error issues with DFS.

What if you live in a state that votes NO on sports gambling or never establishes regulations due to negative stereotypes of gambling? With DK & FD in bed with the bookies, so to speak, this could result in a ban on DFS! Hope you have the number to a good moving company!!!

The addition of sports gambling to DFS sites may actually increase the amount of DFS players. Now, this may sound like a positive upon first glance, but when you look deeper into this statement or play as many tournaments as I do, you can envision a glaring negative: getting shut out from your tournament of choice. They already fill up quite readily; imagine if the amount of players tripled.. quadrupled… you get my point!

Whatever the future may hold, it is certain legal Sports Betting will now have an effect on Daily Fantasy Sports, and it will be the Wild, Wild West! Champs… go clean your guns; Losers… go get your shinebox!