NFL owners may have to dump investments in DFS companies

AP

[Editor’s note: FanDuel is an advertiser of PFT and PFT Live on NBC Sports Radio. Also, NBC Sports has an equity stake in FanDuel.]

With DraftKings and FanDuel being told by the New York Attorney General to cease and desist doing business in New York, the next step for the NFL could be telling its owners to relinquish their investments in businesses that are on the verge of being declared illegal gambling in the state where the league is headquartered.

According to the New York Post, owners like Jerry Jones of the Cowboys and Robert Kraft of the Patriots could be forced to sell their stakes in DraftKings if the efforts of A.G. Eric T. Schneiderman result in a finding that daily fantasy violates New York law.

Per the Post, the issue of NFL owners holding ownership interest in DFS companies could land on the agenda of the next ownership meeting, scheduled for December 2.

The Post also reports that the NFL, which helped lobby for the 2006 federal law that created the DFS industry, currently isn’t lobbying Congress on behalf of DraftKings and FanDuel.

Unlike other major sports leagues, the NFL itself resisted making an investment in DraftKings or FanDuel, a decision that a source with knowledge of the situation previously told PFT was personally made by Commissioner Roger Goodell. Last month, Goodell explained that, despite the federal endorsement of fantasy games, the 50 states have a say in what is and isn’t legal.

“[S]tates are the ones that make the determinations about whether something is legal or not legal,” Goodell said. “We follow the law and we will do that. It is not, from our standpoint and the league, we have not taken any equity positions. We have allowed this to happen on advertising. There are sponsorship opportunities in the stadium, but not with our logos and marks. We’re following other leagues in that case, in the sense that other leagues have taken equity positions. We feel that a cautious approach is the right way but we’re protecting our game.”

That cautious approach could include reversing course on the league’s conditional embrace of daily fantasy, if New York succeeds in its efforts to eject DraftKings and FanDuel from the state. It’s also possible that the NFL will pre-emptively sever ties with the industry, if the NFL believes that it’s only a matter of time before a majority of states determine that DFS games are gambling, which either should be banned from a given state or heavily regulated and taxed, like other forms of gambling.

65 responses to “NFL owners may have to dump investments in DFS companies

  1. Is the real issue, State of New York not gaining taxable revenue from DFS companies?

    Or losing revenue (less lottery purchases, no taxes, etc)?

    After all, if one is sports-aware, one may opt to be a DFS player instead of buying state funded Lottery tickets.

  2. “[S]tates are the ones that make the determinations about whether something is legal or not legal,” Goodell said. “We follow the law and we will do that. It is not, from our standpoint and the league….BUT players are subject NFL discipline for use of weed in Colorado and Washington???? Things that make you go, HMMMMMMMM.

  3. “Unlike other major sports leagues, the NFL itself resisted making an investment in DraftKings or FanDuel, a decision that a source with knowledge of the situation previously told PFT was personally made by Commissioner Roger Goodell.”

    That would be the first wise decision that Goodell has made in years.

  4. They allow on line getting on stocks from the New York Stock Exchange. At least Fantasy Football isn’t rigged, with delayed trading for the little guy, and rampant insider trading. I see no difference.

    If they are going to outlaw daily fantasy football, they should outlaw the public from investing in individual stocks and restrict them to mutual funds.

  5. Government has turned into an organized crime syndicate and should be prosecuted under the RICO act. No difference between them and the Mafia looking for protection money. Lottery good. Fantasy Sports bad.

  6. Goodell: “We follow the law”

    LM FREAKING AO! No Roger, you try to misuse, ignore or circumvent the law as much as possible by abusing contract, twisting regulation, disseminating misinformation with no expense spared, and by lying through your teeth – sometimes to the point of slander. And you only ever resort to the law when it suits – and throw multi-million dollar suits at it when it doesn’t. Or as you call it “protecting the shield”.

  7. I dont know what all the owners agree to in order to have their club remain part of the NFL; but, I feel pretty confident that it doesn’t entail being able to tell the owners what they can and cannot personally invest their own money in.

  8. mgm54 says:
    Nov 13, 2015 7:46 AM
    BUT players are subject NFL discipline for use of weed in Colorado and Washington???? Things that make you go, HMMMMMMMM.
    =============================================
    He probably says that to keep their “Non Profit” status with the feds.

  9. “Unlike other major sports leagues, the NFL itself resisted making an investment in DraftKings or FanDuel, a decision that a source with knowledge of the situation previously told PFT was personally made by Commissioner Roger Goodell. ”

    This really is the best decision Goodell has made as commissioner.

  10. There is no greater Goodell detractor than I. I think he is lying scum and his executive team are scum as well.

    I must admit I think his stance on daily fantasy league’s was the right thing to do. I guess I’ll file that one under the “blind squirrel” theory.

  11. Clear conflict of interest. Can’t believe this wasn’t dealt with from the get go. Oh wait, yes I can.

  12. “He probably says that to keep their “Non Profit” status with the feds.”

    They already gave up their non-profit status, which was a fabricated source of outrage anyway. Some people should really look at how it works because most of you don’t understand.

  13. hmmm… NFL owners involved in some sort of gambling business?? I wonder if they’ll get the same treatment as DeBartolo??

  14. I would imagine the more guys that dump their gambling $ at DFS sites the less they spend with their bookmakers … that my friends is a problem that will not go left unattended.
    hilarious that the owners just milk every single $ out of fans they possibly can. Even vampires stop sucking when a victim runs out of blood

  15. Governor Charlie Baker of Massachusetts said they are legal. and so did the state’s Attorney General, Maura Healey. They recognize DFS as games of skill. New York, which houses the stock markets, say playing the market is good, but playing the “market of football performance” is not. That seems a bit hypocritical.

  16. The problem for the league here isn’t whether fans get to participate in gambling (and these DFS websites are most definitely gambling), or whether the states get their “share” of the action.

    The problem is that when a team owner, (or coach or player or league official) owns an interest in a gambling site it creates a clear conflict of interest for them.

  17. As a Patriots fan, I appreciate that Kraft is an innovative businessman but this was an ill-advised and hypocritical investment that justly stains an otherwise positive and responsible business record, especially his self funded stadium.

    All of the NFL owners should realize that they are very blessed to be the stewards of NFL franchises that not only do business in the markets they are located but are woven deeply into the fabric of those communities. They need to address that inequities we see in the power grab they are attempting in federal courts to turn the CBA into a carte blanche right to run roughshod over players, the continued abuse of local cities and states that drains public money for private use, and to address the the post-career disability inherent in playing in the NFL. They should also encourage a free media to honestly report on their actions instead of requiring they be ESPN type sycophants.

  18. craze32 says:
    Nov 13, 2015 8:38 AM
    nice to see all the potheads up early

    ///////////////////////////////////////////////////

    Cluk.. Cluk… Cluk… you hear that? What’s that? That’s my skull, I’m so wasted. Lol.

  19. “Unlike other major sports leagues, the NFL itself resisted making an investment in DraftKings or FanDuel, a decision that a source with knowledge of the situation previously told PFT was personally made by Commissioner Roger Goodell. ”

    Please, they allowed the owners to do it individually rather than collectively. Let’s not pretend Goodell had any altruistic motive here.

  20. Man this topic is getting more irritating than the Redskins name change topic. DFS is gambling. DFS also requires skill. It should be legal just like online Poker should be legal. I don’t know why these states are so adamant against them. Think of the taxes the states and the feds receiving on the millions of payouts each week. But, it’s probably not enough. Especially if the state of NY is on the trail.

  21. One more point, if they did invest collectively, through the NFL, they would have set up an opportunity for NFL players to ask for their share of the bigger NFL pie that was created.

    There was absolutely nothing altruistic about Goodell’s “personal” decision not to have the NFL invest directly in these enterprises. It was a decision made by a group of influential owners after getting the best law firms in the country to advise them.

    Fans have to stop covering for the owner of the franchise they root for like he’s your brother.

  22. The DFS supporters are fighting the wrong battle.

    They should not be trying to convince people that this is not gambling. (Because we are NOT stupid).

    They should be accepting that this is gambling and that gambling should be legalized.

  23. Let me see, I buy a lottery ticket with money that has already been taxed (yes people, money don’t grow out on trees), and if I win somethin I have to pay taxes yet again (double taxation), and moreover lotterty is gambling too. The government seem to be ok with the idea though, so the moral of the story is that the government is not concern about us gambling, the government is concern about not getting a bigger cut.

  24. Great idea. Push it into the black market, just like current sports betting and online poker.

    After all, those industries’ ethical operators are begging for regulation and taxation on their $10 billion/yr enterprise in exchange for a legal shot at the US market. Just think how many tax dollars that would rake in, from companies willing to pay it.

    Making it illegal has just pushed the business side of it offshore, and unethical operators still reach US customers via the Internet.

    But hey, prohibition of alcohol was a flying success, right? Well, maybe for the Rockefellers, the Bush family, and Lucky Luciano. And nothing bad ever came of Lucky’s stake in the game, right?

  25. Leave it to those two guys to get into the gray area with sports gambling.

    It is my opinion that it is gambling… Hell even the commercials refer to the cash as “winnings.” I’m skilled at what I do too. I don’t win a paycheck, I earn it.

  26. The states are upset they aren’t getting compensated from any of DraftKings or FanDuel’s profits. That’s why they are all making a big deal about it.

  27. Fantasy leagues with prizes are explicitly allowed in the federal 2006 law on internet gambling. States can’t opt out.

    That said, it was a poor law because they didn’t anticipate the daily fantasy “league” loophole. It’s just sports betting, plain and simple.

    Supreme Court here we come.

  28. The NFL can’t keep owners from moving their teams. Yet they’re supposedly going to have success in regulating billionaires outside investments? Assuming Jones didn’t laugh at them outright the most he’d likely do is transfer the investment over to some company he controls or hand it to one of his kids.

  29. Stop the commercials. Mark Cuban is absolutely right. The NFL is making a killing but they think their own gambling operation and selling lies to fans is a good idea.

    I stopped watching NFL Network because of the DFL ads every 2 minutes.

  30. Isn’t it a huge conflict of interest for an NFL owner to own a gambling business that handles bets on players/teams that same owner owns?

    Here is a not so far fetched scenario: Jerry Jones is an investor in Draft Kings. The Cowboys are playing a game in which they are in complete control of and are cruising to sure victory. While at the same time, some obscure Cowboys player is having an unexpected career day and is racking up fantasy points.

    Knowing that Draft Kings will take a huge financial hit if this player reaches a very attainable milestone, the Cowboys remove the player from the game.

    That could make for a really murky situation.

  31. Poker is a game of skill. It’s still gambling. These DFS things are a TOTAL scam. You’re an idiot to think otherwise. It’s been proven, what else do you need? This is exemplary of a society where fact is now up for debate. Give them your money morons.

  32. Gee thats a shocker Jerry Jones and Robert Kraft aka Tweedlee Dee, and Tweedlee dum. nExt thing you know one of them will have something to say about LA

  33. Whatever happened to land of the free and home of the brave.

    Maybe Todays politicians and business leaders and CEOs should go back to school and take a remedial history class. The religious zealots and the ignorant ahould mind their own business and stop trying to tell other people what to do.

    How did we turn this country, that if you dont get your own way, cry and whine like an infant. And if I dont like something, im going to tell you what to do because things need to be seen my way.

    We still have the brave in our service men and women, but the freedoms we have are getting constantly taking away by the religious zealots and the crybaby minority.

  34. A fool and his money are soon parted.

    Or, “we don’t need to feed our stinking families, the government will do it.”

    Or, “give us newer, better stadium so we can entertain our buddies, and you can’t afford to get into, or we’ll screw you again and move.”

    Or, “we need to expand the season…for the fans.”

  35. What about the players involvement, i heard the players union has a stake in draft kings. Also the owners must give a % of the revenue to the player for salaries, do the players give the owners and % of their revenue from the game. I bet not but seems like they should because without the league they would not get that revenue.

  36. Anything Robert Kraft touches is tainted. Goodbye, DFS leagues. Don’t come back until you’re actually built to be credible.

  37. do we really trust that NFL owners won’t try to influence fantasy points if they can figure out a way to make money off it? Personally, I don’t see how owners can justify having equity in a betting site when they have insider info.

  38. richndc says:
    Nov 13, 2015 11:33 AM

    Poker is a game of skill. It’s still gambling. These DFS things are a TOTAL scam. You’re an idiot to think otherwise. It’s been proven, what else do you need? This is exemplary of a society where fact is now up for debate. Give them your money morons.

    ——————————————

    Actually, poker (hold em variations) are not really card games. One player does not play a card and then the next player plays a card based on that one. It is really just a betting and bluffing game.

    – Card order is pre determined when dealing begins.
    – Bets, calls and checks should be made in a disciplined fashion based on percentage of winning.

    Therefore when played on a high level, the only skill involved is bluffing, not getting played on bluffs and knowing when to fold.

  39. Still shocked professional sports leagues now allow their employees and players to gamble on themselves. Pete Rose is so very confused right now.

  40. mgm54 says:
    Nov 13, 2015 7:46 AM
    BUT players are subject NFL discipline for use of weed in Colorado and Washington???? Things that make you go, HMMMMMMMM.
    =============================================
    He probably says that to keep their “Non Profit” status with the feds.
    ===================================
    1)The drug policy, including weed & everything else is included & agreed upon by the players in the collective bargaining agreement negotiated by the players union. Nothing in that agreement says players living in Wa or Co are exempt from this policy because it’s sold in stores.

    2) State legality of a substance has zero to do with where a player resides or performs his job. Employment laws are completely different than state substance legality laws. An employer in a state where weed is legal can terminate you for smoking weed if they consider it one of THEIR banned substances, regardless of state law for use. Including states that only allow it for medical reasons.

    3)The state law says he cannot be arrested for possessing weed, not that he has a right to have an employer employ him if he chooses to partake in an employers banned substance.

  41. That’s nice the owner of the Cowboys and the Patriots have invested in this!!! If it isn’t gambling I don’t know what is. Money passes hands and you pick a player or a team, and you get paid if you pick it right. Anywhere in Europe that’s called gambling, and you pay taxes on it.
    Interesting to see where this goes.

  42. Personally, I think these sites and games are ruining football.

    I understand if you have a really bad team, or as the NFL product continues to deteriorate, that daily fantasy keeps you interested as you bet on players league wide. So having Tom Brady against Marcus Marriota and choosing Marcus, who will not beat Brady on the field, can make you a winner. Only in fantasy does one aspect of a team make you a winner.

    So Cleveland, Tampa Bay, Jacksonville etc. . games have some importance to someone. And how else could that happen? I mean, unless the owners and coaches actually invest time and money in putting together a really good team worth watching. No, the mediocrity of the NFL as a whole is no longer a reason for declining interest, just have one decent player like Basketball, and suddenly, your team is relevant to someone.

  43. I’m just glad Robert Kraft is heavily involved, so I can rest easy that there will be no cheating.

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