FSTA Fails To Respond To Several Proposed Solutions

FSTA Fails To Respond To Several Proposed Solutions

Below is an email sent from Dave Gerczak--a fantasy sports small business owner and co-founder of the SBFSTA--on March 18, to FSTA Board members Paul Charchian, Peter Schoenke, Rick Wolf and others offering a proposed solution that could have resolved the lobbying conflict of interest and ensured the FSTA would lobby for all member companies, not just two.

This email's substance was affirmed by multiple small operators to the group. It went without a response from the FSTA in any way, shape or form.

-----Original Message-----
From: Dave Gerczak - The FFPC
Sent: Friday, March 18, 2016 2:19pm
To: Paul Charchian
Cc: (redacted 15 other recipients for privacy purposes) 

Subject: Re: Fanduel's call to support the terrible NY fantasy law

"Hi everyone,

 

Kindly permit me this lengthy email as I weigh in. I have also attached a copy in Word if that is easier to read.

The FSTA’s bylaws state:

  1. “The specific purpose of this corporation is to promote participation in fantasy sports presentations and activities, and all matters related thereto.

 

Article 3.01:

The Fantasy Sports Trade Association is founded for the betterment of the fantasy sports industry and to encourage (word missing here?) in Fantasy Sports Leagues”

So the stated duty of the Fantasy Sports Trade Association is to promote participation in fantasy sports and better the fantasy sports industry.

 

THE PRIMARY ISSUE

 

There are three different factions of game operators within the FSTA, all of which must be represented per the by-laws of the FSTA itself:

 

Large DFS Sites (AKA FanDuel & DraftKings): These companies are financing the lobbying efforts almost entirely. They are being represented just fine.

 

Small and Mid-Size DFS Sites: These companies are NOT being served in these lobbying efforts to date. They MUST have both a small operator provision and legalization in order to survive.

 

Season-Long Operators: These companies are NOT being served in these lobbying efforts to date. Season-long companies have varying needs depending on the state. In all states, they want separation from DFS companies and deservedly so. Season-long did not start this mess and have generally been deemed to be legal in the vast majority of states. Many of the legislators have been very responsive to separating them from DFS.  For example, this is an email an FFPC player received yesterday from the Legislative Director of a state with regulation being considered. I have redacted the state and names as I am frankly afraid to provide this information to the FanDuel/DK/FSTA lobbying group as you would actually fight against what your season-long companies want here. 

 

“(redacted) forwarded an email to me that you sent to (redacted) regarding his intention to regulate fantasy sports betting in (redacted). Thank you very much for contacting him regarding this issue, one he also holds dear to his heart as an avid sports fan.

 

To assuage your fears, let me be clear that the bill currently being drafted will apply only to DAILY fantasy sports betting (we're taking a lesson learned from Virginia's otherwise well-crafted legislation). The language will clearly define "daily fantasy sports contests" and draw a distinction between them and season-long competitions, which we do not intend to regulate at this time.

 

Thanks for reaching out and please feel free to contact me directly should you have any additional questions or concerns. I'd be happy to talk with you at any time if you have suggestions for improving the bill once it is introduced.”

 

The email above is clear evidence that many states (also Massachusetts, Nevada and others) don’t have any interest in regulating season-long fantasy sports. The legislative director in Indiana told us that the Indiana bill was made for “DFS and season-long was never considered, nor represented”.  In states like Texas and Florida, season-long operators also need legal clarity and must have a small operator provision if not outright exclusion.

 

So now that we have determined that the FSTA’s duty is to represent these three separate member factions and all three have different needs, what is the FSTA going to do? What is it supposed to do, according to its own bylaws?

Here is my proposal:

  • The FSTA admits and accepts a conflict-of-interest in having the same lobbying company as FanDuel and DraftKings, given its bylaws, and that all companies are not represented by these lobbying efforts
  • The FSTA officially makes the statement that FSTA lobbying must represent all member companies, not just FanDuel and DraftKings.
  • The FSTA hires a new lobbyist, one that is able to lobby on behalf of ALL its small-business member companies.
  • The FSTA solicits its member companies and fantasy players for contributions to help fund this new lobbying effort. (The FFPC would surely contribute and solicit our players).
  • The FSTA works with the new lobbyist and gets local lobbyists and media on the ground to work both with and sometimes against the FanDuel and DraftKings efforts, depending on the bill.

The FSTA is currently not giving its season-long companies and small DFS sites the representation that its own bylaws require. This is due to the obvious and glaring conflict-of interest of having the exact same lobbyists and having them financed by FanDuel and Draft Kings. I strongly urge you consider this proposal. Given how things are going, the small DFS sites and season-long small businesses may have no other choice but to go out on their own, leave the FSTA , denounce these efforts publicly, and engage in a lobbying and PR battle for survival against FanDuel, DraftKings and by association, the FSTA.

 

Sincerely,

Dave Gerczak
The FFPC"

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