NFL owners may have to dump investments in DFS companies
[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.