LAS VEGAS — The head honchos at FanDuel want to make something very clear.
The product they sell is not sports betting, they say. It’s something different. In exchange for an entry fee, FanDuel allows sports fans the chance to win cash prizes every day based on the performance of players in professional or college sports.
"We look at it and say, ‘It’s not gambling,’" said Matt King, FanDuel’s chief financial officer. "It’s an entertainment product."
But not everybody sees it that way. And that’s why the topic was up for debate Sunday at a meeting of legislators and gambling industry officials at the Paris Las Vegas hotel and casino.
Led by FanDuel, the daily fantasy sports industry has soared in popularity recently, with promises of payouts ranging from hundreds to millions of dollars.
The question on Sunday was whether it crossed the line into sports gambling and should be regulated as such.
"Of course it’s gambling," said Joe Asher, CEO of the sports gambling company William Hill US. "Of course it’s sports betting. It doesn’t mean that it’s subject necessarily to the same laws. You’re risking money on something of an uncertain outcome, and to me that sounds like gambling."
Asher, King and other experts discussed the subject at a panel for the National Council of Legislators from Gaming States, an organization of state lawmakers that meets to discuss gaming issues.
The topic was ripe. Though American pro sports leagues historically have opposed the spread of sports betting, they all have embraced daily fantasy games in the last two years, largely because it leads to more television viewership and revenue. If fans have money at stake in daily fantasy sports, they are more likely to watch more games than they otherwise would.
"You’re going to see continued integration between fantasy and the team and the league experience," King said.
In November, the NBA even announced it had become an equity investor in FanDuel, making itself part owner of a company that says it pays out more than $10 million in prize money every week.
A day after that announcement, NBA Commissioner Adam Silver declared in the New York Times that sports betting should be legalized and regulated.
Many observers didn’t believe the timing of those two announcement was by accident.
Daily fantasy sports is "a bridge to legalized sports gambling because that’s where the big money is," said Les Bernal, national director of Stop Predatory Gambling, a nonprofit in Washington, D.C.
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