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Scrutiny of DFS continues to aggravate

Scrutiny of DFS continues to aggravate

DFS continues to be under attack by more and more intense state scrutiny. Leading companies in the DFS industry, DraftKings and FanDuel, are on the defensive after taking some serious hits to their business in the last couple of weeks.



ESPN and DrafKings revealed the ending of an exclusive advertising deal this week, whilst FanDuel had dismissed 55 employees in the Orlando-based office. Neither ESPN nor DraftKings wanted to comment about the sudden end of their partnership, however Sabrina Macias, spokeswoman for DraftKings, ensured the company isn't scrimping.

“Our business position is strong and we have no intention to scale back any operations,” she stated, referring to the launch in the UK last week. “We're continuing to innovate and learn.”



FanDuel on the other side, says the dismissals are only within the research and development department. The customer service operation is still expanding. FanDuel CEO Nigel Eccles said the company is focussed on making progress on the legislative front.

“What you're seeing is an industry that is very quickly going from an unregulated state to a regulated state. Whenever you have that, there's going to be turmoil.”



Some experts in the industry think the outcomes of this week might mean the beginning of the end of the daily fantasy sports. Others, such as Jeffrey Ifrah, lawyer in Washington D.C., say the DFS companies have to change the way they operate.

“The current model of extensive advertising and marketing budgets is probably no longer viable.” Ifrah thinks the regulation might mean the end of significant advertising, and perhaps lead to a reduction in future private investment in the industry.