Reported in the Wall Street Journal, FanDuel CEO Nigel Eccles is calling for more government intervention to regulate fantasy sports.
He said a plan announced this week by the industry’s trade group to police itself with an outside control board is positive but doesn’t go far enough. “Consumers want a higher level of protection,” he said in an interview. “They need to know it’s fair, that the information is protected. If the consumer doesn’t trust the industry than the business doesn’t exist.”
I see this move of supporting “regulation” as a way to protect the company from new competition. People have seen by the “insider trading” scandal that these companies aren’t always honest. In the current market for fantasy sports, it wouldn’t take much to create a company that could compete with FanDuel as a more honest alternative. By implementing legislation for the industry, FanDuel can say, “Look at us. We’re on the up-and-up now,” while not really having to change anything since the two main daily fantasy sports firms, FanDuel and Draft Kings, will have a large say in what the regulations are since their people are the most knowledgeable on the business end of the industry.
This type of regulatory capture happens in every industry that has heavy “government regulation.” The major pharmaceutical companies have carte blanche with the FDA. The head of the USDA and Monsanto is basically a revolving door of the same people. Wall Street doesn’t just control the Federal Reserve, they created it as a way to gain power and snuff out competition.
If regulations are put into place for daily fantasy sports like Nigel Eccles would like to see, the quality of the product will diminish, while an increase in corruption would occur.
Fantasy sports is already a regulated industry. We the consumers regulate it by where we choice to be customers. By using the government to intervene and regulate, the power is being taken from the consumers’ hands.