Daily fantasy sports giants DraftKings and FanDuel will no longer provide an opportunity to bet on college athletics after reaching a deal with the NCAA.
The move is a result of an extended conversation about the place for daily fantasy sports in modern culture, specifically college campuses here, that has taken place in state legislatures around the nation over the past year. David Purdum of ESPN.com broke the story of the latest progresssion on Twitter Thursday, revealing the details of the college sports deal in a later post.
The NCAA has long opposed the use of daily fantasy for college sports, as it feels the system could place a student-athlete in a precarious position of being asked to offer some sort of inside information to a participant. According to ESPN, the institution alerted both companies in October that neither would be allowed to buy advertisements to run during the NCAA tournament, though several conferences accepted advertising money throughout the year.
Despite the ban on advertising, both still offered full services for March Madness, which will serve as the final college event offered by either company for the foreseeable future. The discontinuation will go into effect following this weekend’s Final Four games. NCAA President Mark Emmert released the following statement on the matter to CNBC Thursday.
“We appreciate and commend DraftKings and FanDuel’s action to stop offering contests involving college, high school and youth sports. This action culminates months of hard work between all parties to reach a place that is good for amateur sports and most importantly, the young people who participate. We will work diligently with our member schools over the coming year to ensure such amateur sports ‘carve outs’ are included in pending states’ legislation.”
Both DraftKings and FanDuel also released statements in which company spokespeople praised the work being done to create a “carve-out” for college sports and still push the daily fantasy industry forward. DraftKings made sure to include that the service provided is one that is “skill-based,” a claim that the companies have made use of to categorize the business as a game of skill and not gambling.
We continue to see tremendous support for fantasy sports in legislatures across the country, with nearly 30 states advancing thoughtful and appropriate regulations for fantasy play. [W]e will work closely with the NCAA and lawmakers on a carve-out for collegiate sports in any proposed regulatory framework moving forward. DraftKings is committed to ensuring that fantasy sports players are able to continue to play these skill-based contests that bring them closer to the sports that they love.”
FanDuel’s statement largely echoed that of DraftKings’s:
“[F]anDuel has had months of productive conversations with the NCAA, their member institutions and various state legislators to better understand their concerns around fantasy sports contests based on amateur athletics,” a company spokesperson said in a statement. “It is clear that this is an issue that matters to a variety of constituencies and we feel that the best path forward is to suspend offering these contests pending resolution on the issue within state legislatures.”
According to Purdum, college sports only make up three percent of FanDuel’s revenue, while the revenue of DraftKings’s NFL business is “10 to 20 times larger” than its college football division.