The fantasy sports industry is undoubtedly a rapidly-growing business that constantly needs to innovate in order to attract the attention of new players. Despite all the legal hurdles that the industry-involved companies faced, the daily fantasy sports (DFS) craze keeps on sweeping across the U.S. Many states considered adopting gambling-friendly regulations due to the economic benefits that come along. Even though the DFS is a proliferating market, legislators should be realistic regarding the potential profit.
Driven by the broad economic benefits, New York was among the states that labeled DFS as a legal gambling activity. In 2016, New York Gov. Andrew Cuomo finally inked legislation to legalize daily fantasy sports in the Empire State. That opened the doors for the industry leaders FanDuel and DraftKings to operate in the state. Because of gambling laws, the two companies shut down paid contests in New York.
Prior to legalizing DFS, market experts projected that New York is to enjoy “abundant” revenue stream. A legislative memo pointed out that the state will be able to use DFS revenue to fund its over $25 billion education tab. However, reality turned out to be totally different than expectations. It was reported that New York reaped $3 million DFS tax revenues from the 15 companies, that are licensed to operate in New York for the last fiscal year.
This Wednesday, the Racing and Wagering Committee held a public hearing to determine the impact of the DFS law. Speaking of the results, Assemblyman Gary Pretlow, the chairman of the Assembly’s Committee on Racing and Wagering, commented that even though the numbers failed to meet the state’s expectations, it is still a better result than nothing.
Ways to Improve the Industry’s Profitability
Representatives from some of the leading fantasy operators also attended the meeting. They proposed certain ways to increase the industry’s profitability in order to bring more revenues to the local economy. The company executives suggested that the state should allow more sports, so that the companies can add new gaming options to their portfolios.
Apart from that, the company executives asked the state to step back from its plan to require all games offered to consumers to be approved by the state. Peter Schoenke, chairman of the Fantasy Sports Trade Association also explained that the state should allow the so-called “real-time” fantasy wagering. This means that the DFS fans will be able to place live prop bets. Industry experts are convinced that the real-time options are to attract the attention of a great number of players as these are more interesting.
In the coming months, the U.S. Supreme Court is to decide the future of the sports betting. Supposing that the Supreme Court rules out in favor of the industry, it is expected that more than 30 states would introduce sports betting bills that are to legalize gambling on major U.S. professional sports leagues such as the National Football League (NFL) and the National Basketball Association (NBA).