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  • jeffgo33

    http://www.nytimes.com/2016/10/24/sports/draftkings-fanduel-daily-fantasy-near-settlement-with-new-york-state.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region&region=top-news&WT.nav=top-news

    The daily fantasy sports companies DraftKings and FanDuel are nearing a settlement agreement with New York’s attorney general over claims that they engaged in false advertising when they spent nearly a half-billion dollars blitzing the national airwaves with commercials last year, according to two people familiar with the discussions who spoke on the condition of anonymity because negotiations were continuing.

    The agreement with the attorney general, Eric T. Schneiderman, was expected to cost the companies a total of $8 million to $12 million, according to the two people. It would also require the companies to acknowledge the findings of Mr. Schneiderman’s investigation into fraudulent practices and perhaps require them to institute even stronger consumer protections than those adopted in August when Gov. Andrew M. Cuomo made the games legal in New York.

    DraftKings and FanDuel are so short of cash, according to the two people familiar with the negotiations, that they have asked Mr. Schneiderman’s office if they can pay the final settlement in installments, and they have conceded that they are having difficulty meeting their day-to-day obligations.

    Within the past three weeks, the New York-based FanDuel has laid off more than 60 people, and both companies have acknowledged that they are months behind in their payments to vendors, especially to the array of public relations and lobbying firms that they have employed across the nation to persuade individual state legislatures to legalize daily fantasy games — the most critical component of rebuilding their business.

  • VinnyT87

    Deadspin has had it out for DFS from day one, pretty much along the same lines of John Oliver. They don’t dispute that it’s a fun activity, they take issue with the employees and execs who won’t acknowledge it’s gambling and favors the top 1(0)%. It’s about one notch below Donald Trump in terms of their level of disdain.

    It’s a funny site, but it’s really gone downhill since it got acquired by Gawker, way too many snarky liberal PC articles. I always keep this in mind when reading anything on their site. They may mold public opinion, but they aren’t always accurate in what they depict. They are just skilled at “spinning” an issue the way they want it perceived.

  • Lathum

    @MrFantasy said...

    DFS is legal. Online poker was never legal. I wouldn’t worry about your player funds one bit.

    This is the kind of naive attitude that cost people millions. Where is the guarantee that players funds are safe?

  • KindGuy

    @Lathum said...

    This is the kind of naive attitude that cost people millions. Where is the guarantee that players funds are safe?

    Ok now you’re scaring me

  • munco

    @VinnyT87 said...

    Deadspin has had it out for DFS from day one, pretty much along the same lines of John Oliver. They don’t dispute that it’s a fun activity, they take issue with the employees and execs who won’t acknowledge it’s gambling and favors the top 1(0)%. It’s about one notch below Donald Trump in terms of their level of disdain.

    It’s a funny site, but it’s really gone downhill since it got acquired by Gawker, way too many snarky liberal PC articles. I always keep this in mind when reading anything on their site. They may mold public opinion, but they aren’t always accurate in what they depict. They are just skilled at “spinning” an issue the way they want it perceived.

    Gawker started Deadspin from the ground up.

  • munco

    Laying 60 people off is not something you just make up. I think some of you guys not wanting the shaky state of these companies to be true is clouding your judgment.

    If fanduel or dk can raise more money I think things will be a bit more stable but they might be having trouble doing that at this point.

  • madmanjayWV

    @Bighouse55 said...

    Must be a very poorly run company or more likely the owners are taking exorbitant draws knowing this is all gonna blow up and the will be set up for life.

    Are you trying to say you foresee a “JOINT” or “COMBINED” …..effort up coming?

    P.S. — “very poorly run” —- that obvious?

    “The daily fantasy sports companies DraftKings and FanDuel are nearing a settlement agreement with New York’s attorney general over claims that they engaged in false advertising when they spent nearly a half-billion dollars blitzing the national airwaves with commercials last year.”

  • madmanjayWV

    @munco said...

    Laying 60 people off is not something you just make up. I think some of you guys not wanting the shaky state of these companies to be true is clouding your judgment.

    If fanduel or dk can raise more money I think things will be a bit more stable but they might be having trouble doing that at this point.

    That’s OK — it will just drive all the traffic to YA-HOOO

  • KindGuy

    I withdrew from DK before going to bed last night. Looks like I’ll be playing on Yahoo from now on……. Can’t take any chances.

  • BigRay

    @VinnyT87 said...

    Deadspin has had it out for DFS from day one,

    it might ….. but original article was NY Times

  • wolfjb1

    The fact that they’re allegedly behind in paying their lobbyists and PR firms – you know, the people who saved the entire industry – is more than troubling. If I’m a lobbyist in, let’s say, New York and I am owed a big chunk of change, I might talk to my buddy, the lobbyist in Pennsylvania, and suggest that he get paid up now, or stop working until the money comes in. Which seems really counter productive for DK.

  • Chuky

    Well I’m very puzzled by this. If these allegations are true how in the world these two still having mega tournaments for NFL in December? Especially DK with that hefty 10 million dollar prize pool? I see fanduel scaling back but not DK

  • lineupofpeace

    @MrFantasy said...

    You realize that most players would play more if the rake was lower, correct? The rake going up means more and more players won’t show a profit. Most people will quit or treat it like a lottery ticket if rake continues to trend upwards.

    You do realize the vast majority of players have no idea what the rake is, or would even notice that it goes up 1% in a $3 GPP?

    The other main source of volume (sharks) will play regardless.

  • sethayates

    @munco said...

    Laying 60 people off is not something you just make up. I think some of you guys not wanting the shaky state of these companies to be true is clouding your judgment.

    If fanduel or dk can raise more money I think things will be a bit more stable but they might be having trouble doing that at this point.

    How much money would they need to raise? Would $150 Million do it?

    http://www.forbes.com/sites/darrenheitner/2016/09/01/draftkings-raises-150-million-to-kickoff-2016-nfl-regular-season/#632c095b758d

    DraftKings only had one week of overlay in NFL. They’ve been filling everything in preseason NBA, MLB etc. They aren’t losing money in their day to day operations and they just raised $140 Million a month ago.

    Maybe ask yourself why that wasn’t included in the article. The answer is easy. The author is trying to paint a doom and gloom picture.

    P.S. This post isn’t meant to sound condescending. I just quoted your post because I think this is a popular sentiment. People don’t realize these sites can easily raise money. They just don’t want to take a “down round”

  • Georgesteele

    I am going to assume that player funds are kept in a separate account. And they are running their business with operating revenue and costs from an entirely different account and having the same growing pains that most companies have when they first start out.

  • Chuky

    @sethayates said...

    How much money would they need to raise? Would $150 Million do it?

    http://www.forbes.com/sites/darrenheitner/2016/09/01/draftkings-raises-150-million-to-kickoff-2016-nfl-regular-season/#632c095b758d

    DraftKings only had one week of overlay in NFL. They’ve been filling everything in preseason NBA, MLB etc. They aren’t losing money in their day to day operations and they just raised $140 Million a month ago.

    Maybe ask yourself why that wasn’t included in the article. The answer is easy. The author is trying to paint a doom and gloom picture.

    P.S. This post isn’t meant to sound condescending. I just quoted your post because I think this is a popular sentiment. People don’t realize these sites can easily raise money. They just don’t want to take a “down round”

    Thx for answering my questions. Now I see why draftkings prize pools are so large. I’m amazed at how some here still are skeptical about money being safe when it’s now being regulated. I swear some ppl have nothing to do.

  • Lathum

    @Chuky said...

    Thx for answering my questions. Now I see why draftkings prize pools are so large. I’m amazed at how some here still are skeptical about money being safe when it’s now being regulated. I swear some ppl have nothing to do.

    google Black Friday online poker.

    Millions of businesses go belly up every year and take customers money and investments with them, why is DFS any different?

    I’m not saying it will happen, and likely wont, but you would be taking an unnecessary risk keeping too much money on these sites.

  • Campbell00021

    @Lathum said...

    google Black Friday online poker.

    Millions of businesses go belly up every year and take customers money and investments with them, why is DFS any different?

    I’m not saying it will happen, and likely wont, but you would be taking an unnecessary risk keeping too much money on these sites.

    “millions of businesses go belly up every year and take customers money and investments with them” I’m not so sure about that. It does happen, but it is not an epidemic going around.

  • pointsmuncher

    As a player who can I trust to report on this industry (and these specific concerns) without any bias?

  • desertdanny

    @pointsmuncher said...

    As a player who can I trust to report on this industry (and these specific concerns) without any bias?

    I don’t read too much on the industry as a whole but this guy has been good on twitter. https://twitter.com/WALLACHLEGAL

  • Sports100

    .

  • dude_abides7

    @Ross said...

    How is this more likely? Wouldn’t the “more likely” thing be the massive legals fee’s these companies are paying to fight for DFS in multiple states?

    They are only “fighting for DFS” because of the poor, short-sited way they managed their companies. The are only “fighting for DFS” because they decided to ignore public outcry, red flags and the voices of 98% of their user base and rather catered to the 1% of that base that was winning 95% of the money and pushing their rake.

    They are here because they decided to dig their heads in the sand and go invisible when they needed to be transparent. 90% of where the industry is today could have been avoided if these companies were run smartly from the get go. I have zero sympathy for them. These are/were self induced wounds. They were greedy. They were ignorant. They were stupid. They deserve it.

    Unfortunately, we are all gonna pay in the end.

  • Myseashell42

    Just saw a piece about this on outside the lines on espn.

  • precator

    @MrFantasy said...

    DFS is legal. Online poker was never legal. I wouldn’t worry about your player funds one bit.

    But still if you have thousands of dollars in your account, and only play like 50 bucks a night max, just withdrawal most of it and when you run low deposit again. Also prevents you from tilting when you are drunk and playing $500 dollar buy ins, lol.

  • cedric19

    @Lathum said...

    They are owned by Disney and don’t want involvement in anything that can even be construed as not wholesome.

    That’s hilarious

  • PJGuin23

    DFS Tax Guru

    @dude_abides7 said...

    They are only “fighting for DFS” because of the poor, short-sited way they managed their companies. The are only “fighting for DFS” because they decided to ignore public outcry, red flags and the voices of 98% of their user base and rather catered to the 1% of that base that was winning 95% of the money and pushing their rake.

    They are here because they decided to dig their heads in the sand and go invisible when they needed to be transparent. 90% of where the industry is today could have been avoided if these companies were run smartly from the get go. I have zero sympathy for them. These are/were self induced wounds. They were greedy. They were ignorant. They were stupid. They deserve it.

    Unfortunately, we are all gonna pay in the end.

    Hate to say I agree. At the end of the day, people want to play this and gamble on sports. Yes, I said the G-word. Well run and trusted, the sky’s the limit. You could have a 25% rake and people would still play IF DFS was trusted by the public. If the lottery can run after all these years with a 50% rake with it being no skill, all luck and little fun, DFS can too. Perception is reality right now. It’s also clear from recently playing, there arent many newbies entering. Given the right circumstance, I feel DFS should be much larger than it is especially after the VC it received.

    Better hope for full sports betting and online poker in your states. AGA is now pushing for it per LSPR. Online part, we’re waiting for the CA and PA dominoes to fall. Again, don’t want to raise income, sales or property taxes.

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