Three Threats that Could Harm the Daily Fantasy Sports Industry

With so many daily fantasy sports services reaching new heights in 2015, it is only natural to believe that the sky is the limit in terms of growth.

However, just the same as any industry, there are threats to the well being of daily fantasy sports. There are some reasons for concern, with the following threats at the top of the list:

State of New York

Why would one state pose a threat to such a large industry? Well, New York Attorney General Eric T. Schneiderman has decided to open an inquiry into the industry.

In a New York Times piece, a letter from Schneiderman to FanDuel CEO Nigel Eccles was published. In the letter, Schneiderman requests information in relation to reports that FanDuel employees may have gained access to nonpublic data, allowing them to enter and win contests sponsored by other services.

In a radio interview, Schneiderman added the following:

“It’s something we’re taking a look at — fraud is fraud. And, consumers of any product, whether you want to buy a car, participate in fantasy football, our laws are very strong in New York and other states that you can’t commit fraud.”

The investigation may not turn anything up, but it is a story to keep an eye on.

The Media

Let’s face it: more and more members of the media are beginning to cover the daily fantasy sports space. As a result, some are beginning to formulate opinions, right or wrong, on the state of the industry.

Negative publicity is never a good thing, even if it is unwarranted. As the media continues to bash daily fantasy sports, it could eat away at a player base that is currently growing at an unprecedented pace.

The United States Government

This is something we have discussed in the recent past, noting that industry regulation could be coming sooner rather than later.

If the federal government begins to regulate the industry, much like the stock market, it is going to turn things upside down. Just how, however, remains to be seen.

Final Thoughts

These three threats to the daily fantasy sports industry are well worth watching. In the months to come, it will be interesting to see if these initial threats turn into something more serious.

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