FanDuel and DraftKings rivals form splinter lobby group

The Small Businesses of Fantasy Sports Trade Association will represent interests of industry’s smaller operators

A number of daily fantasy sports (DFS) operators have formed a new lobbying group away from the Fantasy Sports Trade Association (FSTA), which they say has been “co-opted” by industry giants FanDuel and DraftKings. [private]

The Small Businesses of Fantasy Sports Trade Association (SBFSTA) has been established to better represent interests of smaller players as a growing number of states move to regulate the activity.

The newly-formed trade body said the FSTA was set up to represent “all its members, big and small” but had been railroaded by the big two into supporting legislation across the US that would “effectively shut down smaller operators”.

“Policy makers and the public have been led to believe that DraftKings and FanDuel speak for all fantasy sports operators. They do not,” the SBFSTA said in statement.

The SBFSTA, which has 35 members including the likes of Star Fantasy Leagues and Fantasy Aces, will focus its lobbying efforts in New York in a bid to amend the $500,000 license fee proposed under recently introduced legislation (SB 6793).  

The bill would also impose a 15% rate of tax on gross gaming revenues, and both the license fee and tax rate have been backed by FanDuel and DraftKings.

SBFSTA spokesman Alex Kaganovsky said the bill was little more than a “concealed effort” by the big two to “eliminate competition by driving out the hundreds of small operators who cannot possible pay the high fees and taxes”.

“We will take this fight across the country on behalf of all of the fans,” Kaganovsky said.

“We will not stand by while the two major players in the industry, which have direct financial ties with three of the major professional sports leagues, are permitted their own duopoly in New York,” he added.

The trade body said it “became clear” the FSTA had been co-opted by FanDuel and DraftKings after legislation passed in Virginia and Indiana to legalize and regulate DFS, which it said was “devastating” to smaller operators in each state.

“We understand the desire on the part of lawmakers to have some say in how our industry operates,” Kaganovsky said.

“But we just want to make sure we have a level playing field so that no one group has advantage over another.”