Is Daily Fantasy Sports a form of gambling? Study seems to say it does

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[toc]Daily fantastic sports it’s like the game.

This is the conclusion we will come to after examining Rutgers Center for Game Studiesrecent report: The prevalence of online and land gambling in New Jersey, Nower, L., Volberg, RA & Stall, KR (2017).

Of course, if DFS sites like DraftKings and FanDuel are empirically or legally a form of gambling is a conversation for courts and state legislatures.

“Whether or not DFS plays the game is beyond the scope of this report,” the researchers note. However, the report clearly shows that DFS players exhibit many of the same characteristics as traditional players (and have a high crossover rate).

This isn’t the best news for the DFS industry.

While trying to gain approval from state houses across the country, DFS has waged a war on the word “gambling”. The industry likes to describe itself as a game of skill that has little in common with traditional forms of gambling. DFS supporters use analogies like chess, the stock Exchange, spelling bees, and bowling leagues, and it sells itself as good, clean fun.

The Rutgers study indicates that it has some commonalities with traditional forms of gambling.

The fallacy of skill-based gambling

Before delving into the DFS Prevalence Report results, I want to offer some thoughts on peer-to-peer skill games with betting components.

In a previous column, I asked if poker players and other advantage players were not bias data on problem gambling.

But there is a second piece to this puzzle. Are so-called skill games a factor in problem gambling behavior and / or are they magnets for problem gamblers?

Poker, DFS, and other games are sold as Skillful. We are led to believe that if the players are smart and diligent enough, they will have no problem beating the game.

The problem is, these games are played against other players, so the skill is only relative to that of others. It’s not about practicing Mike Tyson’s Punchout hour after hour every day and find the right patterns and strategies to beat each boxer. In DFS and poker, opponents are also able to improve.

For this reason, and because of the rake / fees charged by the house, there can only be a limited number of winners. Yes black jack were beatable with perfect strategy (suppose blackjack paid 2-1), then each qualified player would be a winner; they could all adopt the same strategies and beat the house.

Poker and DFS can be games of skill, but for 95% of players their skill won’t translate into any winnings.

But due to the way the games are sold and due to the variance, players can convince themselves that they are qualified enough to win. Maybe right now they’re just out of luck, or they’re about to be qualified enough to win and just have to work harder, they can rationalize themselves.

It is not difficult to see how this state of mind could lead to addictive behavior.

That being done, let’s move on to the conclusions of the study.

DFS is like day trading?

The researchers explained the reasoning behind their inclusion of DFS (and day-trading) as follows:

“The majority of the activities listed in this study are historically classified and widely accepted as ‘gambling’ because they involve spending money on activities with uncertain outcomes and the possibility of winning or losing. which may cause damage. However, other activities are beyond precise classification and depend largely on context and jurisdiction.

“Trading in stocks, for example, has traditionally been viewed as a skills-based investment focused on the composition of earnings over time. The advent of day trading, however, has shifted the focus from investing to the exciting and immediate activity of taking greater short-term financial risks on options and futures for the potential for greater earnings. important but also greater losses.

Likewise, traditional fantasy sports games were originally season-long competitions based on actual player performance and were exempt from the Unlawful Internet Gambling Enforcement Act of (2006) (UIGEA) because they were based on a large measure on the knowledge and skills of the players. players.

“… Given the lack of consensus on where high-risk stocks and everyday fantasy sports fall in the gaming spectrum, they are included in this study as a separate section.” “

DFS results don’t paint a pretty picture

According to the Rutgers study, “A total of 336 respondents (out of 1,500) have approved participation in Daily Fantasy Sports (DFS) in the past year.

In all but seven cases, DFS players also participated in traditional games of chance. That means 98% of DFS players in the survey also played on slots, bingo, live casino table games, other skill games, sports and horses.

According to the report, 84% of DFS gamers played non-DFS games once a week or more, placing them in the high frequency group. Ninety-five percent of DFS gamers landed in the high frequency / high risk problem gambling group.

With a sample of 336 people, more research will be needed. But at first glance, it seems like DFS players share a lot with traditional players. And when it comes to addiction in general, they’re much more likely to succumb than traditional gamers, as this graph shows.

Mental health problems?

One of the strangest discoveries is the high level of mental health issues among the DFS group.

The report states, “In particular, DFS gamers also reported higher levels of substance use, behavioral issues, and mental health issues than other non-DFS gamers. “

“… Half of the sample used tobacco, four-fifths consumed alcohol, and one-third reported excessive use of alcohol and illicit drugs. DFS gamers were more than twice as likely as other gamers to approve of problems with overeating, nearly four times as likely to have issues with sex and pornography, and five times as likely to have problems with overeating. excessive exercise. More than a quarter of DFS players have reported serious mental health issues in the past 30 days, twice as many as other players.

The report also states that DFS gamers were “13 times more likely to report suicidal ideation” than traditional gamers. They are also “nine times more likely to have attempted suicide than other players.”

According to the study, “these findings suggest that DFS gambling is strongly correlated with problematic and disorderly gambling and a host of other mental health issues.” Policymakers should take this data into account, the study suggests.

“Policy decisions regarding the regulation of DFS should anticipate a very high prevalence of gambling problems in this group and the negative consequences that generally accompany these problems such as employment, legal, relationship, financial, health and health problems. mental. It is important to ensure that prevention, education and treatment resources are developed and available for this population.

Final thoughts on DFS and gaming issues

The only thing the report proves about DFS is that more research is needed.

If DFS players are equally or more likely to be victims of the mental disorders that affect problem gamblers, then similar responsible gaming procedures should be put in place.

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