DFS legalization would push small operators out of business
Wednesday, March 30, 2016 : SMALL FANTASY SPORTS STAKEHOLDERS TAKE ON PERCEIVED DUOPOLY IN NEW YORK STATE
Proposed legalization would push small operators out of business, says SBFSTA.
A newly formed coalition of the smaller fantasy sports business and vendor sector says it will fight the duopoly comprising FanDuel and DraftKings who support proposed New York State legalization that would see prohibitive licensing fees of $500,000 and a tax regime of 15 percent of gross gaming revenues effectively put small operators out of business.
The Small Business Fantasy Sports Trade Association (SBFSTA) formed when the Fantasy Sports Trade Association (FSTA) was deemed to have been co-opted by FanDuel and DraftKings and no longer represented the interests of all members big and small, SBFSTA said.
“Policy makers and the public have been led to believe that DraftKings and FanDuel speak for all fantasy sports operators. They do not,” Alex Kaganovsky, spokesperson for the SBFSTA said. "We will take this fight across the country on behalf of all of the fans. We will not stand by while the two major players in the industry, which have direct financial ties with three of the major professional sports leagues, are permitted their own duopoly in New York."
Kaganovsky said in a press statement that as written, the current New York bill sets up a battle between David and Goliath and is little more than a concealed effort by DraftKings and FanDuel to eliminate competition by driving out the hundreds of small operators who cannot possibly pay the high fees and taxes called for in the legalization.
"Mom and Pop type businesses count for about 95 percent of the fantasy sports industry. There is a lot more to fantasy sports than DraftKings and FanDuel. Small businesses have been the lifeblood of this industry for decades.”
Recent legalization passed in Virginia and Indiana will also have a devastating effect on small fantasy sports businesses, leaving only the large operators room to afford new licensing fees and taxes.
"Existing small businesses and start-up companies need smart legalization that will allow them to operate and thrive in the great state of New York alongside the billion dollar giants like FanDuel and DraftKings," Kaganovsky concluded.
