DFS, Advertising and the Potential Cost of a Messaging Narrative

Michael J. Ricciardelli, 2015Perhaps, as the International Business Times has noted, there’s an element of backlash against Daily Fantasy Sports (DFS) from a public bombarded by its advertising: The New York Times reported that Fan Duel and Draft Kings spent “more than $27 million for about 8,000 television spots in the opening week of the N.F.L. season”; according to iSpot.tv, which tracks national TV advertising spending, in the last seven days of this week Fan Duel alone spent an estimated $11,234,816 on 1,662 buys –-enough to garner it 6th place—behind Geico, Ford and AT&T, but ahead of Verizon, iPhone and Toyota and all but, well, only five other companies in the entirety of the United States.

Which is to say, DFS ads are everywhere –- and If you are a sports fan they have, for good or ill, become a part of your life.

And beyond a generalized level of annoyance, maybe part of the difficulty DFS now faces (and it faces some major and mounting difficulties) is rooted in that message they spent so much to have tattooed within the popular psyche— which is to say, to some extent, they may have been hoist by their own petard.

Two ads or aspects of DFS ads immediately come to mind for me: 1) a young man who says he deposited a total of $35 and has won over $2 million; and 2) another man who, also a winner, says that the only difference between him and all the people who didn’t win is that he played and they didn’t.

Which sounds to me, a bit like an ad for a lottery.

And, as the Seton Hall Sports Poll noted in the release of its poll on Oct. 1, 2015, for DFS the

“waiver to advertise and promote in sports telecasts was based on [the] argument that it is not gambling.”

But, as the poll found, a “wide margin” questioned disagreed:

And, it seems, other people—attorneys general, district attorneys, legislators, the Department of Justice, the FBI, media networks and even the heads of college athletic leagues — are beginning to have questions of their own.

DFS has had to respond and those responses are not without cost: a few weeks ago FanDuel hired Steptoe & Johnson as its federal lobbyist; this week, in the wake of calls for state and federal regulation, the Fantasy Sports Trade Association (established in 1998, who knew?) appointed Seth D. Harris to head a Fantasy Sports Control Agency. Seth Harris is the former acting Secretary of Labor and a former Professor at New York Law and a Visiting Professor at Seton Hall Law School (in the interest of disclosure, I’m a graduate of Seton Hall Law; Go Pirates!). He is also a member of the Public Policy and Regulation practice at Dentons US LLP, and has been charged with “creating a strict, transparent and effective system of self-regulation for the businesses that comprise the fantasy sports industry.”

Whether or not the lobbyists can hold the wolves at bay and/or self-regulation will ultimately be deemed by the powers that be to be sufficient, I do not know; but I do know this: win, lose or draw it’ll be an expensive proposition, but even more expensive with a loss.

Going forward, DFS might want to consider the impact of its messaging and the importance of a consistent narrative. And, when it comes to its legislative, lobbying and lawyering efforts, DFS had better hope it picked the right team.

 

 

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