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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.

  • zombiekopitar

    @precator said...

    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.

    Holy crap, story of my life

    So many times I should have withdrawn, but then got drunk lol

    I’m hopeful that the industry will smooth out…..this is a case of poor execution by 2 companies trying to beat each other to this hypothetical land race they created. The industry will find a way, just maybe both can’t stay standing. Which is their own damn fault.

  • BigRay

    @PJGuin23 said...

    @dude_abides7 said…

    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.

    THIS ^^^^^^^^

  • TheRyanFlaherty

    @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.

    I think you’re grossly overestimating the amount of players that even know what rake is, much less bother (or could even) calculate it.

    The biggest issue for DFS is that they sold itself as, “Hey you watch sports, you win your office fantasy league, come to our site and win money….it’s easy.”
    That created the boom, but then slowly but surely, casual players realized it’s hard and the people that are winning money aren’t super fans, but some of the most brilliant minds in the country. It’s not easy, it takes lots of research, work, and a high (and or creative) intellect.
    That’s when you started to see all the complaints and nonsense….That’s what less intelligent people do when something is beyond comprehension…they scream that it’s rigged and unfair and make excuses because it’s every bodies fault but their own as to why they are not succeeding.
    The sites have not always helped in this area, particularly FanDuel where lineup providers and sharks scooping H2H’s is the norm and it all negatively effects the retention of casual players. DraftKings has been more proactive – you see it in all their recent changes, getting rid of late swap, missions, fair play, higher payout percentages, so we’ll see what kind of impact that has.
    As DK’s still has issues you can point to that are off-putting to a typical player – i.e. – The top players in the world max entering .25 games to win $10.

    I’m sure there also are a large number of casual players that do stick around, because the entertainment is worth the cost of admission and the chance at a big prize, but it’s up to the sites (and to a lesser extent the community) to make that the norm and not the minority.

  • vino24

    • 2019 FanDuel WFBC Finalist

    @TheRyanFlaherty said...

    That’s what less intelligent people do when something is beyond comprehension…they scream that it’s rigged and unfair and make excuses because it’s every bodies fault but their own as to why they are not succeeding.

    I believe the “less intelligent people” were the ones that found out about the scripting going on that wasn’t allowed except for the “pros,” the scooping of games using scripts, and the circumvention of the entry cap, among other things. Explain please how these people who “scream that it’s rigged and unfair” are in the wrong?

  • jhorst52

    • 38

      RG Overall Ranking

    • Ranked #31

      RG Tiered Ranking

    • x3

      2016 DraftKings FFWC Finalist

    • x2

      2016 FanDuel WFFC Finalist

    Can we change the title of this thread to something not so negative sounding?

  • DomTwan

    More smoke and mirrors.

    Both companies will be fine, it will just take some time for the sunk cost of all these legal fees to be absorbed and for the companies to prosper again.

  • Heterodox

    @jhorst52 said...

    Can we change the title of this thread to something not so negative sounding?

    Oh ffs.

  • Heterodox

    @TheRyanFlaherty said...

    I think you’re grossly overestimating the amount of players that even know what rake is, much less bother (or could even) calculate it.

    Do people not understand that the more people lose the less they can play? Why do people keep making the point I quoted? It doesn’t matter if they know why they lose as much or as quickly as they do. When the money’s gone they don’t play. High rake makes that happen faster.

  • PJGuin23

    DFS Tax Guru

    @Heterodox said...

    Do people not understand that the more people lose the less they can play? Why do people keep making the point I quoted? It doesn’t matter if they know why they lose as much or as quickly as they do. When the money’s gone they don’t play. High rake makes that happen faster.

    I beg to differ. I predict higher rake could mean less “Pros” and more Casual entrants. Again, look at the lotteries at 50% rake. As long as it’s seen as safe and not rigged, people will play. The public is not there yet, but wants to be.

  • catmando

    someone said do not complain about rake being high cause site is out of money LOL…oh so if govt blows our money we should not complain about higher taxes LOL….I am stunned…NOT that sites did not argue 90 percent lost money thus they paid the fines

  • catmando

    Ray has a point..is RG in the business of being an affiliate and promoting sites or being a player advocate site? i would say without a doubt they are in business to make money. No sites…no money they do not do this for charity

  • KindGuy

    Damnit, I’m at a crossroads. I withdrew from DK and got my money this afternoon. Thinking about Yahoo but the prize pools are so low compared to DK. Any ideas?

  • Unico10

    • 584

      RG Overall Ranking

    @VinnyT87 said...

    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)%.

    And they would be wrong… HOW?

  • Heterodox

    @PJGuin23 said...

    I beg to differ. I predict higher rake could mean less “Pros” and more Casual entrants. Again, look at the lotteries at 50% rake. As long as it’s seen as safe and not rigged, people will play. The public is not there yet, but wants to be.

    People play the lottery because it requires zero effort while offering some chance of a payoff. DFS takes time and effort, and when you lose it hurts. The comparison does not hold, yet it gets made all the time.

  • Davey224

    I’m not a gambler. I don’t go to the casinos, don’t play online, don’t do any sports betting etc. outside of DFS.

    I was one of those who got drawn in by the advertising. I love football and making fantasy teams seemed fun. I started last year and it took me about 2 weeks to realize that the game was stacked against players like me, who were intrigued by the extension of a sport we love. I know what a rake is and it doesn’t really factor into my decision to keep playing.

    I still play because it’s still fun. Most weeks I win to cover my entries and that is enough to keep me playing. But I’m not blinded by the reality that DFS wasn’t setup with hobbyist players in mind. But I play low entry fee games and drop in single entries where I find contests worth playing.

    The solution to their problem was easily implemented early on, and they chose not to. Limit multi-entry contests, create more single entry, increase % of field payout, put limits or restrictions on those who have won over a certain amount of money per year etc. Plenty of solutions were available to bring “skill” ahead of “gambling”, but they didn’t. The lure of big money caught the DFS operators just as much as it did the sharks. The prey? The casual players.

    The only highlight to DK and FD are the friends league. I actually have more fun now playing against friends. I’m considering other DFS operators that cater more to the sports fans. Just my .02$

  • jjwd

    @elementasrat said...

    Damnit, I’m at a crossroads. I withdrew from DK and got my money this afternoon. Thinking about Yahoo but the prize pools are so low compared to DK. Any ideas?

    No need to withdraw from DK.

  • FFguru71

    These sites are putting in “regulations”, but they still haven’t done the one thing that will fix the industry immediately…lower the max entries to a REASONABLE amount(150 is NOT reasonable), like 10-20 per contest, and watch DFS thrive. Yet, they refuse to do it

  • Unico10

    • 584

      RG Overall Ranking

    @FFguru71 said...

    These sites are putting in “regulations”, but they still haven’t done the one thing that will fix the industry immediately…lower the max entries to a REASONABLE amount(150 is NOT reasonable), like 10-20 per contest, and watch DFS thrive. Yet, they refuse to do it

    MME has been discussed a lot and I have been mostly critical, but I think that for large tournaments 150 can be reasonable.

    What I think they can and should implement is a max contest per user per day… granted, we all know that there is people that will get around it to some extent, just like they do in the large tourneys, but that would hopefully stop the high rollers from playing the buy-ins at $5 and lower

  • Heterodox

    @pointsmuncher said...

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

    Do you actually think there’s anyone reporting anywhere on anything without any bias?

    The number one skill you can learn in life is to parse the bullshit that is in literally every statement anyone ever makes. No one is reporting without bias. That doesn’t mean they aren’t reporting facts, it’s just on you to keep the source in mind when interpreting them.

    And the people who constantly feel the need to ignore the content of articles and focus on the bias behind them are usually either engaging in willful self-delusion or they are trying to distract you from the facts being reported. Of course some articles are without merit entirely, but while the NYT has had a bias, I don’t think you can say their reporting is without substance. Deadspin might be a different case, but, I mean, it’s Deadspin, so who really cares?

  • dude_abides7

    @Unico10 said...

    MME has been discussed a lot and I have been mostly critical, but I think that for large tournaments 150 can be reasonable.

    Not when “teams” are pooling their entries to systematically ignore the 150 entry limit rule and violate the sites “stated” TOS.

  • jjwd

    @FFguru71 said...

    These sites are putting in “regulations”, but they still haven’t done the one thing that will fix the industry immediately…lower the max entries to a REASONABLE amount(150 is NOT reasonable), like 10-20 per contest, and watch DFS thrive. Yet, they refuse to do it

    Many threads have been dedicated to this “debate”….. you can learn about it elsewhere. But just so you know, many people disagree with you. I would like to see much higher entry limits, the industry would get a boost from that immediately imo.

  • jjwd

    @dude_abides7 said...

    Not when “teams” are pooling their entries to systematically ignore the 150 entry limit rule and violate the sites “stated” TOS.

    Raise max entry limits, reduce the prevalence of “teams”.

  • Unico10

    • 584

      RG Overall Ranking

    @dude_abides7 said...

    Not when “teams” are pooling their entries to systematically ignore the 150 entry limit rule and violate the sites “stated” TOS.

    Of course. We do agree on this 100%

  • fanturds

    im not that good, I don’t really do the research that is needed to consistently win, and the biggest problem I can identify is what FFGuru71 and others have pointed to……

    if the players don’t win, they won’t play. I have gotten somewhat close recently on some NFL GPPS, and that keeps me interested. Frankly, after ten years+ of doing season long, it gets a little boring getting fired up for a matchup against the guy from accounting or that dude who sometimes hangs out with my one friend…

    I do have time to watch NFL most nights, but I have to think that once you get to the upper boundry of 18-35 the amount of time they can commit to watching football goes down considerably.

    College kids don’t have money. So who is the target audience? 23-32 year olds? degenerate gamblers? If you suck at season long, you probably won’t be very good at DFS, and a lot of people suck at season long.

    its difficult to figure out a contest scheme where you can please everyone, and still “grow”. NFL probably is doing ok, but I have to wonder about the other sports.

  • fishcakeking

    FCK

    @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.

    If I remember correctly most of the people laid off were in the Orlando wing of Fan Duel which was purchased from Zynga. This was nto core to their business and happened long ago.

    There were two major claims 1) they arent paying vendors 2) they cant pay the settlement.

    I have little doubt that some vendors arent being paid, but these are likely some of the crazy deals the sites signed during mega expansion and now they are leveraging to renegotiate,

    As for not being able to pay the settlement, this is most likely a negotiating tactic again to get better terms for them to pay the money.

    A merger will likely happen, but I think one site is wating for the other to get really desperate and have no choice.

    FCK

    Edit: I apparently read an early version of the article without specifics. I was wrong about layoffs. They were recent. Also on debts, they are to the pr firms and lawyers. i hope drape is wrong.

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