Fantasy teams draw real online bets
"If it brings in revenue, so much the better" - but compulsive gamblers "should stay away"
A fantasy-sports betting site linked to stories about pro athletes on the Inquirer and Daily News Web site, www.philly.com, has brought in “hundreds” of paying gamblers in its first two weeks, raising cash for the papers and their betting-site partner, says Warrick Taylor, vice president of California-based, Scottish-owned www.fanduel.com.
Fanduel, an arm of Edinburgh-based Hubdub, cut a deal with Philadelphia Newspapers LLC to link the sites and allow viewers to bet on fantasy teams composed of actual players. Teams “win” or “lose” based on the statistical performance of that team’s players in a given span of time. “The launch is exceeding our expectations,” said Yoni Greenbaum, vice president at philly.com. More than a quarter of the “few thousand” people who visited the site daily placed at least the minimum $5 bets, he told me.
Bettors put money on their team against other fantasy teams. For two-person games betting $50 each, the pot is $90 for the winner, with the other $10 raked off by the house, to be split by Fanduel and the Web site. Bettors can put up to $500 in their accounts to bet with via Visa, MasterCard or PayPal, and can put in more when they lose if they want to keep playing.
Hubdub investors include Scottish venture-capital firm Pentech, and Hubdub chief executive Nigel Eccles, a veteran of www.flutter.com, now part of www.betfair.com, which calls itself the biggest UK-based betting site. Hubdub originally offered European newspaper readers “virtual bets” on news events such as the outcomes of presidential elections. But sports quickly established itself as the site’s most popular offering, Taylor said.
Is this legal? Fanduel cites the federal Unlawful Internet Gambling Enforcement Act of 2006 that bans betting on pro teams, but exempts “fantasy or simulation sports” in which prize levels are set in advance and “winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results” of individual athletes “in multiple real-world sporting” events.
“Right now we offer the four major pro sports in the U.S. — football, baseball, basketball, hockey. We’ll probably add college sports. And there’s pent-up demand for golf and soccer,” Taylor told me. The company wants to add games on Facebook, and on Apple’s iPad, if those companies agree.
Fanduel plans to sign more newspapers and help them compete with ESPN, which has set up its own local sports Web sites, Taylor added. “Anything we can do to help newspapers and vice versa would be beneficial,” he said. Fanduel has also approached ESPN about a deal, but “discussions haven’t progressed to the point where there’s a partnership.”
“This is something a problem gambler ought to stay away from,” Irv Ketzes, of Willow Grove, Philadelphia-area spokesman for Gamblers Anonymous, told me. “Those of us who are compulsive, we don’t know how to stop. We should stay away from it.”
Newspapers “need these things,” Philadelphia Newspapers' Greenbaum told me, “to help make your product stand out. And if it brings in revenue, so much the better.”
