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DraftKings Investors Want Regulation

Tuesday October 20,2015 : DRAFTKINGS INVESTOR FAVOURS REGULATION
 
Kraft says company would welcome oversight.
 
The president of one of daily fantasy sports operator DraftKings important investors said over the weekend that the beleaguered DFS company is willing to accept regulation and would welcome the oversight.
 
Kraft Group president Jonathan Kraft (he also owns the US football franchise New England Patriots) was speaking on the Sports Hub radio show ahead of one of his team's key games Saturday, and opined that daily fantasy sports companies should be regulated.
 
“I think both [DraftKings and rival FanDuel] companies ... are both willing, and I think they welcome the oversight,” he said. “And what I’ve read of both companies’ CEOs, they’ve said everything should be transparent, and we’re open to regulation, which is probably the right next step. But I think fantasy sports is pretty much a part of mainstream culture now in our country, and I think it’s a nice element of what we have, and I think it should be regulated as well.”
 
Amid the continuing row over the legality and probity of DFS, FanDuel CEO Nigel Eccles said recently that his company looked forward to interacting with regulators across the US on the details of regulation for the booming vertical.
 
DraftKings CEO Jason Robins recently told The Boston Globe that although he did not think regulation was necessary, he would be "...open to, and accepting of, regulations put on us.”
 
In related news, the New York Times reported that although FanDuel has closed out Nevada punters following the state's ban on unlicensed DFS activity last week, DraftKings continued to accept entries over the weekend, apparently in defiance of the Nevada Gaming Control Board order.
 
Approached for comment, a DraftKings spokesperson acknowledged that the company had made an exception for some of its Nevada players, explaining:
 
“Because our game is nuanced in the fact that we allow late swaps, we allowed players who had already entered games on Thursday to be able to continue their full experience with the product until games close and are paid out on Monday night, regardless of their location.”
 
She added that DraftKings was serious about complying with the NGCB order, even though it disagreed with the Board's decision.
 
“We notified all Nevada customers of the issue and requested that they withdraw all funds and close their accounts,” she said. “We also implemented blocking mechanisms for Nevada residents from creating new accounts, depositing money or playing new games.”
 
A.G. Burnett, chairman of the Nevada Gaming Control Board, said he was aware of DraftKings’ stance and that his agency was monitoring the situation.
 
“We have been and will continue to test the DFS operators’ websites and apps to determine if they’ve disengaged from Nevada or not,” he said of the daily fantasy sports sites. “Failure to disengage can constitute a crime; we will work with our counsel on what are the next steps forward, should that be the case.”



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