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Daily fantasy sports controversy: Questions of regulation, legality

draftkingsSince I embarked on my Star Tribune-sponsored $50 daily fantasy game experiment a few weeks back, one of the biggest questions on my mind — and the most frequent question I’ve been asked — is simply: how is this legal?

(Quick aside: For those who want an update on the nitty gritty of how I’m doing, I’ve played 6 different games, won small amounts on a couple of them, and have $30 of my original $50 still in my account. I’ll probably play a big NFL game this weekend to keep the experiment going, though I haven’t done anything with my account in over a week).

But yes, back to legality. Many people, myself included, have a hard time with the idea that these daily fantasy games are legal (at least in 45 states … Arizona, Iowa, Louisiana, Montana and Washington don’t allow them). Why is it legal to wager money online on what players will do while betting on what teams will do is illegal?

The specific reason they are legal goes back to a piece of legislation that is now nearly a decade old called the Unlawful Internet Gambling Enforcement Act of 2006. I’ve heard it described by people who understand the law better than I do as a convoluted piece of legislation, and one that is fraught with controversy.

The gist of the UIGEA is that it made certain online gambling — like online poker — illegal in the United States. But it specifically created an exemption for fantasy sports. The act is said to have been “rammed through Congress” and one senator says nobody even saw the final version of the bill before it was passed. A piece in the Economist also alludes to a “hastily” approved law.

This 2011 Q&A with gambling law expert Anthony N. Cabot also notes that the law and fantasy exemption passed thanks in large part to intense lobbying from the NFL. That entire Q&A is fascinating and covers some ground I won’t get to in this post. But essentially, fantasy games were deemed “games of skill” and not games of chance, and are therefore legal. You can decide whether you buy that or not, but that’s the reason.

So what we appear to have is a law that passed nearly a decade ago that was controversial from the outset. But that’s how fantasy games — including daily games — are legal, even if few could have imagined how massive they would become thanks in large part to technological advances and major money/backing from some big hitters.

The larger question is how long they will stay legal or at least unregulated, particularly in the wake of mounting controversy and criticism. A scandal broke Monday in which an employee of DraftKings (the site I’m using) won $350,000 on FanDuel (another major player in daily fantasy games) after having access to information not available to the general public. It’s unclear whether he used this information to his advantage, but it’s a perception issue regardless.

Both companies have temporarily prohibited their employees from playing daily fantasy games on other sites (they were already prohibited from playing on the sites for which they work). But it raised all sorts of questions about a tilted playing field, since having information about how many people are using players X, Y and Z can dramatically improve the odds of winning a fantasy game in which everyone has access to the same players in a salary-cap style draft.

This is massive business. The New York Times, in reporting on the scandal, noted: “Eilers Research, which studies the industry, estimates that daily games will generate around $2.6 billion in entry fees this year and grow 41 percent annually, reaching $14.4 billion in 2020. So high are the potential financial rewards that DraftKings and FanDuel have found eager partners in NFL teams, even as league executives remain staunch opponents of sports betting. Jerry Jones of the Dallas Cowboys and Robert K. Kraft of the New England Patriots have stakes in DraftKings.”

So yes, it could very well be ripe for regulation based on how much money is at stake. Then again, do you trust a system of government that allowed this to be legal without apparently even seeing a final version of the law to do so?

That’s a much bigger question than the one at hand. For now, it’s up to a lot of individuals to decide what they trust, what they think and how they want to proceed. My hunch is that this controversy will barely register a ripple with the players who are seduced by the prospect of a million dollar payout, even if there exists the possibility that the playing field is stacked against them.

The lure of money is driving both ends of this train. I felt it when I entered a contest with a $2 million top prize. The top of the food chain is dealing in billions, not millions, as noted above.

It might not be a matter of staying one step ahead of the law, but as the stakes go up, the questions mount. Kansas recently passed a law fully legalizing fantasy sports, perhaps emboldening DraftKings, FanDuel and their ilk.

“As advertising has grown, there’s been a lot of scrutiny,” Peter Schoenke, President of Rotowire.com and Chairman of the Fantasy Sports Trade Association, told me in a recent interview. “But the industry is confident that when people look at it and see it’s a game of skill, there will be a similar outcome as there was in Kansas.”

Time will still tell, but time is moving faster than ever. And the speed of potential regulation is no match right now for the one-touch speed of playing a daily fantasy game.

5 things Molitor did this year that Gardenhire probably wouldn't have done

molitorLet’s start Monday with an impossible question because impossible questions make for good debates. It’s a question that’s been rattling around in my head for a while, so indulge me:

What are some things that Twins manager Paul Molitor did this season in his first year on the job that Ron Gardenhire probably would not have done?

Now, I say probably because this is the impossible part: nobody knows how Ron Gardenhire would have managed the 2015 Twins. We do know that Molitor won 13 more games than Gardenhire did in any of the previous four seasons, but we also know the 2014 Twins were at least looking far less hopeless than their three predecessors and that Molitor had more talent to work with this season than Gardy did from 2011-14.

So this is based on speculation and tendencies. Here are my conclusions of five things Molitor did this year that Gardenhire probably wouldn’t have done. (Thanks for the help from Twitter, too, which was hilarious even when not being helpful).

*Handling of Glen Perkins: Perkins was lights-out before the All-Star break (1.21 ER), but post-break he struggled with injury, command and (it seemed) confidence as a result of those first two (and it added up to a bloated 7.32 ERA). He only had four saves after the break, and none after Sept. 1. Molitor started using Kevin Jepsen to save games when Perkins was injured, and he kept him in that role even when Perkins was healthy. It’s hard for me to imagine Gardenhire doing the same thing; Jepsen proved effective in that role through the end of the year.

*Handling of Trevor May: May was a decent starter for the first half of the season before the Twins, primarily out of need, moved him to the bullpen in early July. Long-term, May likely projects as a starting pitcher (or at least will get that chance). But he thrived as a reliever, adding velocity to his fastball and posting a 2.87 ERA out of the bullpen as opposed to 4.43 as a starter. Maybe that was more of a Neil Allen move, or at least a move made in tandem. But I can’t imagine Gardy and/or Rick Anderson taking a young starter who had at least shown signs of being effective and moving him into the bullpen at that juncture of the season..

*Defensive shifts: Molitor is a big proponent of defensive shifts, which have been proven over time to save teams from giving up hits (at least until batters learn how to more consistently counter-attack them). The Twins used them subtly and obviously this year, to their advantage — and far more than they did a year ago.

*Pinch hitting for Buxton: Molitor pinch hit for prospect Byron Buxton on multiple occasions, most notably in late August when he used Chris Herrmann in that role. The merits of the move are certainly questionable; it’s tough for me to imagine Gardy doing it, for better or worse, based on the notion of not damaging Buxton’s confidence.

*Lineup creativity: Molitor used 124 different starting lineups this season. That might sound like a lot, but Gardenhire actually used more (132) last season. So it’s not so much quantity as the way Molitor went about structuring his lineup. With most key members of the lineup staying reasonably healthy this year, he was not afraid to shift guys around in the order to try to take advantage of matchups. It’s hard to quantify, but it felt like he was less averse than Gardenhire was at doing this. (And I certainly can’t imagine Gardenhire hitting a pitcher 8th in an NL park, as Molitor did several times).

Anything I’m missing? Your thoughts, please, in the comments.

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