Anyone who watches professional football on TV has likely seen the commercials for DraftKings or FanDuel, the two biggest companies in the growing industry of one-day fantasy sports. The ads make fantasy games sound easy. Select a sport, pay an entry fee (typically $1 to $20) and choose a lineup of players based on who you think will perform well in that day’s real-life games. Assemble a better team than your competitors, and you stand to win a jackpot of hundreds of thousands of dollars or more.
But with beginners facing off against elite players, chances are you won’t be the next “regular guy” holding a giant check on TV between quarters. About 70% of daily fantasy players broke even or lost money over the past year, according to Eilers Research, a gaming research firm.
Daily fantasy is considered a game of skill, which currently exempts it from a federal law prohibiting sports gambling. That may change. The FBI and the Justice Department are investigating, and class-action suits have cried "foul." Six states already label daily fantasy as gambling—including Nevada, whose gaming commission sets the tone for regulators nationwide.
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