Adam Silver is again leading the major league commissioners pack by calling for clear regulation of daily fantasy sites. Silver, who has been vocal in his support of sports gambling as long as it is highly regulated, is welcoming government intervention of the industry in which the NBA has a stake (the NBA has equity in FanDuel and many teams have partnerships with daily fantasy sites). The NBA commissioner continues to lead from the front by stating that the industry is in need of regulation and transparency.
Silver is right to call for regulation and not complete destruction of the DFS business. The proverbial cat is already out of the bag, and multiple lawsuits are going to take some time to sort out in court. With the amount of money involved, from high-powered venture capital investment to league and media partnership deals, DFS has become too big to disappear. Silver has taken a measured approach explaining that the recent insider trading incident has shown the need for the federal government to regulate the industry, much in the same way he has called for the expansion of outcome-based sports gambling.
For now, there is no need for the leagues or teams to break off their partnerships. Everything up to this point has apparently been done within the law. The law may be flawed, but the business model is not. DFS sites continue to thrive — even with a slight downturn in entries last week — in a market where there is clearly a desire for the product.
Gambling and fantasy sports benefit leagues, teams and advertising partners as it increases engagement in games spectators may not otherwise have interest in. It generates revenue — illegal gambling generates as much as $1 billion a year by some estimates — and it just seems as if the momentum is moving toward legalized gaming rather than against it.
Leave it to Adam Silver to clearly lay out the common sense take that should be followed by most professional leagues. The NBA welcomes stricter regulation on something many people outside the leagues see as inevitable. Daily fantasy is already here. The next step is making it as transparent and fair as possible.
Michael Colangelo is Managing Editor of The Fields of Green and Assistant Director at the USC Sports Business Institute.