Fantasy sports hearing likely, GOP chairman says

Greg Nash

A House Republican chairman said on Thursday that he is likely to call a hearing on the new fantasy sports sites that critics say are skirting gambling laws.

"My sense is that we will do a hearing," said Rep. Fred Upton (R-Mich.), the chairman of the House Energy and Commerce Committee. "There’s a lot of things on our front burner right now, but I think this is an issue that we ought to take a look at.”

Earlier this week, Ranking Member Frank Pallone, Jr. (D-N.J.) asked Upton and Commerce, Manufacturing, and Trade Subcommittee Chair Michael C. Burgess (R-Texas) to hold a hearing on the questions posed by sites like DraftKings and FanDuel as well as fantasy sports in general.

Upton said he has spoken with Pallone on Thursday, though cautioned that he had not “examined [the letter] thoroughly” and that the hearing would not take place in the “short-term” because the committee has a busy agenda.

The swift rise of the "daily fantasy" sites, which allow users to put money down on a daily basis instead of once a season, has caught the attention of critics like Pallone. The sites say they are not gambling venues, but offer “games of skill.” Pallone argued this week that the industry was subject to a confusing latticework of laws — making it ripe for congressional review.

As they have become more prominent, the sites have formed partnerships with professional sports leagues and teams. Pallone has called the leagues and teams hypocritical for backing the sites while opposing legalizing sports betters around the country. Some of the leagues have sued in his home state of New Jersey to block the legalization of sports betting at racetracks and in Atlantic City.

“Now it’s a billion-dollar industry with multimillion-dollar jackpots and huge advertising that goes on all day long to get people to participate,” Pallone said earlier this week.

“So, this is gambling, outright, and yet they continue to spend millions of dollars, in a hypocritical sense, to try and stop sports betting through their lawsuits because they claim it’s immoral or it’s going to get the players ... involved in organized crime.”

DraftKings and FanDuel have attracted significant investments, not just from the leagues but also from broadcasters like Fox Sports and NBC Sports, and are both valued at more than $1 billion. In recent months, they have unleashed a torrent of advertising during live events — including Sunday’s NFL games, and even Wednesday night's presidential debate.

Upton pointed to the changing nature of the industry as a reason for congressional scrutiny. “It’s a larger issue than it was before and I think [Pallone] raised some good points in his letter,” he said.

Burgess noted in a statement Friday that the subcommittee had items on its agenda that might take priority over examining fantasy sports.

“The letter from Ranking Member Pallone certainly raised some interesting questions," he said. "But there are a lot of pressing and important issues before the subcommittee and full committee right now, as stressed by the chairman.”

On Wednesday night, when he said he had not read Pallone's letter, he said he was not particularly familiar with the websites.

“I don’t do it, I don’t know anyone who spends a lot of time with it, it’s new territory for me,” he insisted.

This post was updated at 9:26 p.m.