Healthy Competition in the Daily Fantasy Sports industry

Exorbitant licensing fees are the real anti-trust culprit for the Daily Fantasy Sports industry – can you say oxymoron?

 

The FTC needs to consider setting a cap on the DFS licensing fees that states charge.  The Daily Fantasy Sports industry provides a much better overall model when states keep the licensing fees, which really means ‘barrier to entry and therefore competition’, low or non-existent and collect tax revenue from them like any other business. This levels the playing field and keeps the competition among daily fantasy sports operators healthy and vibrant.

 

Since this time last year, fully 67% of the Daily Fantasy Sports operators have faced immense hurdles, with many closing shop, mainly because of the high licensing fees charged by some states.

Here are a few of the states making intelligent licensing (or non-licensing) decisions that facilitate an atmosphere of healthy competition among DFS operators as well as securing a steady flow of tax revenue –

Kansas – ZILCH – NADA – no licensing fees
Maryland – No licensing fees
Iowa – $500 registration fee
Minnesota –  $500 registration fee

Here are the states that are facilitating an antitrust atmosphere and strangling small operators who would have possibly provided a long term tax revenue source for that state:

Indiana – $50,000 registration fee
Missouri – $10,000 registration fee
Nebraska – $10,000 registration fee
Pennsylvania – $50,000 registration fee
Virginia – $50,000 registration fee

Licensing fee info courtesy of Sports Legislative Tracker

As the DraftKings/FanDuel merger moves closer to finalization, let’s hope the FTC is paying attention to how many small operators have been barred from competing and have eventually folded because of the financial barriers to entry imposed by several states, which in turn is hampering competition and providing less choice to the consumer.

Since the Federal Trade Commission’s principal mission is the “promotion of consumer protection and the elimination and prevention of anti-competitive business practices”, the FTC needs to blanket the Fantasy Sports industry with a ‘game of skill’ banner and require the states to treat it like any other business as far as regulation and taxation are concerned.  Now for those of you who would find fault with the Federal Government taking authority from states in the matter of Daily Fantasy Sports licensing fees but not in the matter of, say, marijuana legalization, the perspective we need to keep in mind is one of liberty.  RESTRICTING states from being able to apply DFS Licensing fees, which are a barrier to creative business expression, PROMOTES liberty, and ALLOWING states to legalize recreational marijuana also PROMOTES liberty.  To make America great again we only need to liberate the creative, entrepreneurial spirit that once existed here and has become dormant. The Daily Fantasy Sports industry is a good place to start.

 

If you want to get involved then email the FTC and tell them that “high state licensing fees are creating an anti-trust atmosphere in the Daily Fantasy Sports Industry and limiting our consumer choices – please set a cap on the licensing fees that states can charge.”  They’re email address is antitrust@ftc.gov (link sends e-mail)