Smaller companies in the expanding fantasy sports industry could be devastated by the five- and six-figure entry fees in new legislation passed by states trying to regulate the business.
The largest companies – FanDuel and DraftKings – insist they are opposed to the charges but have apparently not made it a priority to fight the expenses.
Rishi Nangia, a co-founder of Syde, a startup fantasy sports provider based in Arlington, Virginia, said of the efforts to make sure the business is considered legal, We now know that these companies are fighting for their bottom line.”
Ultimately, he said, the result of startup fees such as the $50,000 charged in Virginia and Indiana and the $500,000 proposed in New York will mean the industry is controlled by the two major operators.
New legislation has come about because of the desire of states to regulate for the benefit of consumers an industry that has been largely unregulated. Season-long fantasy sports has been around for years but daily fantasy sports are a much newer creation.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: [email protected].