Monthly Archives: December 2015

Sports Poll Cited in MarketWatch on Fantasy Sports, ‘Gambling’ and how to Invest in DFS

RothbortProfessor Scott Rothbort of the Stillman School of Business cited findings of the Seton Hall Sports Poll in an article he wrote for MarketWatch.

In the article, “4 ways to make money on fantasy sports without gambling,” Rothbort, the founder and president of LakeView Asset Management, writes:

Daily fantasy sports or “DFS” sites have been all the rage recently, as its advertising has inundated the airwaves, participation has surged and controversy has taken root. Governmental regulators and attorneys general have voiced their opinions as to its legality (or lack thereof) in hearings and pronouncements too numerous to list. Furthermore, there was even an “insider trader” case which raised some concerns as to fairness in these sports fantasy leagues.

In other words, there’s a lot of heat being generated in the space. Is it a passing fad or is there something lasting here as a business? And if so, what does that mean for a potential investor (as opposed to a player)?

The Seton Hall Sports Poll, conducted by the Sharkey Institute at Seton Hall University‘s Stillman School of Business, recently asked the public what they thought about DFS: Are these games of skill or gambling; should they be regulated; and, should they be legal?

In the November poll, 50% say they believe it is a form of gambling, 30% say it is a game of skill and 20% did not know. This compares to the same poll conducted in September in which 52% said gambling, 31% responded skill, leaving 17% who did not know. The lack of any real movement in these numbers, despite all the controversy during the time between the polls, indicates a solid result.

Also in the November poll, on the question of should there be state regulation: 51% said yes and 35% said no. As to legality, in the same poll, 54% said it should be legal and 38% said illegal.

The takeaway from these polls is that a majority of respondents believe that the sports-fantasy industry should be legalized and regulated. That is really what the attorneys general want. By doing so, this would enable the states to: control the activities, impose licensing fees, and make sure they get their fair share of taxes from winnings. The IRS already requires the issuance of a 1099 form for winnings over $600, much like what is done at the racetrack, and hence the federal government already has its finger in the sports fantasy pie.

I am not a regulator or an attorney. I am an investor and finance professor. My questions are not on legality or gambling but … how can you make money by investing alongside the fantasy sports industry? Read more.