Daily Fantasy Sports Games May Be the Next Compulsive Gambling Problem

Thursday, October 08, 2015

GoLocalPDX News Team and Kate Nagle and Brendan Murray

Daily Fantasy Sports games offered by FanDuel and DraftKings are avoiding regulation by claiming to be games of skill rather than chance. However, one area the daily fantasy sports games look identical to games of chance is their compulsive nature, according to those who treat gambling addition.

The head of the National Council on Problem Gambling is seeing a big change -- and a growing problem. To him, these daily fantasy sports games look just like gambling.

“Yes, especially since daily fantasy sports betting has expanded. It's almost impossible to get addicted to gambling on a season long fantasy league. With daily fantasy you can obviously bet far more often and win more often and that is very relevant to addiction,” Keith Whyte of the National Council on Problem Gambling tells GoLocal.

The daily fantasy sports games play outside the regulation of traditional regulated gambling and the marketing behind the games is unmatched.

“According to iSpot.tv estimates, DraftKings and FanDuel together have funneled $107 million into the networks' coffers since Sept. 1. Nearly half ($50.3 million) of that outlay was spent on national NFL broadcasts on CBS, Fox, NBC, ESPN and NFL Network," writes Ad Age magazine.

"While fantasy sports is not a new industry, the daily fantasy sports market still appears to be in its infancy and has found a way to tap into a large, growing, and social/mobile engaged audience. The consumer appeal of DFS largely stems from the instant gratification it provides – a theme that resonates strongly across many new popular consumer verticals,” say Eilers Research in their recent release from last October. Eilers Research reports that the industry now exceeds $2.5 billion and expected to hit more than $14 billion in five years.

Growing Problem

The problem of compulsive gambling is massive and is expected to increase significantly with the growing popularity of daily fantasy sports games and the massive marketing support.

About 2 million U.S. adults are estimated to meet criteria for pathological gambling (1% of the adult population). Another 4-6 million (2-3%) would be considered problem gamblers.

The National Council on Problem Gambling identifies a number of factors that lead to compulsive gambling and those factors and descriptors look like a FanDuel or DraftKings TV commercial. Risk factors for gambling problems include most likely being male, athletic, 18-24 years old, and highly competitive, to name a few of the factors.

“There are three reasons, which are really the same reasons anyone becomes addicted to gambling. Some people see it as an investment and think they can beat the system. Some are addicted to the rush and the action. Some people use it as an escape from their normal lives,” said Whyte.

No Protection

Casinos and state lotteries offer protection and fund programs to combat compulsive gambling. “The Lottery provides information and support to help all customers understand the games and how to keep their gambling within their own limits,” writes the Oregon Lottery, who provides 24-7 tools for players to address issues or answer questions about compulsive gambling.

Across the country, casinos as a condition of their licenses offer a number of programs to minimize gambling abuse. Their is no mention of the problem or links to resources on the websites of DraftKings of FanDuel - they may see it as an admission that their products are gaming rather than skill.

“The treatment is just like that of any other gambling addiction. It's no different than any patient we see from playing the lottery or casino games. They go through the same steps and same treatment process as anyone else. It's not so much what game they are playing, but how often they are doing it and the way the are doing it,” said Whyte.

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