The same government that warned you off whole milk and urged you to load up on carbs may now be moving to protect you from the snares of fantasy sports wagering. And the people who worship at the temple of government believe this is the just and proper thing to do. Presumably they will put the same people who ran Fannie and Freddie on the case.
Fantasy sports betting has, of course, exploded recently. One reason for this is what detractors call a “loophole” in something called the Unlawful Internet Gambling Enforcement Act. This was passed back in 2006 when Congress didn’t have anything better to do and the aforementioned Fannie and Freddie, with the help of the big (regulated) banks and the Federal Reserve, were busy setting things up for the near-total collapse of the economy.
Congress managed to ban most forms of Internet gambling. And who knows how close the Republic came to total ruin from the effects of wagering on, among other things, professional football games. But the law made an exemption for fantasy sports sites, on the grounds that these were games not of chance but of skill.
The distinction is one that would delight the same medieval philosophers who argued over just how many angels could dance on the head of a pin and who declared that the tail of a beaver was actually a fish and could, therefore, be consumed on Friday by good Catholics. You had to study the numbers and the lineups if you were going to field a winning fantasy team. As opposed to just picking the Saints, say, over Atlanta because you had gone to New Orleans on your honeymoon and had a soft spot for the place.
Nobody seemed troubled by the exemption. At that time, fantasy sports sites were organized around full seasons. You picked your team members and watched them perform, game by game, week by week. Then someone came up with the idea of weekly teams and big jackpots. And thus were born FanDuel and DraftKings, a deluge of television advertising, and big-dollar investors who saw a dead solid way to cash in on the combination of Americans’ favorite pastimes, sports and gambling.
The government and the usual scolds have found this intolerable and are already in full pursuit of the fantasy industry, eager to run it to ground and domesticate it. They want what they call “sensible” regulation. Which would include, as outlined in a Bloomberg editorial:
– Auditing of the technology—including the algorithms used by the sites.
– Use of geolocation tools to block players in states where the sites are illegal.
Furthermore (and here is the really good part),
It is, you see, about the children.
Now, the states already do a pretty good business in gambling.
Casino gambling is legal and regulated in many states. There wouldn’t be a Las Vegas, where the Democratic presidential candidates gathered to debate, otherwise. One wonders how far Senator Harry Reid’s home state has gone to “verify identities, enforce limits on losses and use data patterns to recognize problem gamblers.” Likewise the state of Illinois, where you really have a problem if you play the state’s lottery. The state doesn’t have the cash on hand to pay the prize money it has promised.
But even the states that run honest numbers games are hitting on that segment of the population that can least afford it. Lotteries let themselves off the moral hook by saying the money goes to fund education. Once, again, it is about the children.
The people who want fantasy sites regulated are pointing to stories about how employees at one of the big sites have won big by placing bets at the rival site. It has yet to be demonstrated that this involved some kind of unfair edge, though certainly if you spend your entire work week (and more) dealing with the metrics of professional football, you might know more than the guy who checks in with USA Today before he makes his picks. But if there has been collusion and fraud, one can be sure that class action lawyers will soon ride to the rescue.
Americans like to gamble. And the passion takes many forms. Some of us like to play fantasy football. Others (Hillary Clinton, for instance) like to play the futures markets. But there is also a residual streak of puritanism in the American character. We like to gamble but we feel guilty about it.
The fantasy sports sites will, no doubt, soon be regulated. This is fine with Washington since it means more work for K Street. And there will be committees that must hold hearings, studies that must be conducted, rules that must be enforced.
Amid all this, one wonders if the explosion of interest in fantasy sports betting isn’t really a symptom of something that truly is a national problem. One from which the big thinkers are hiding.
If there were no fantasy sports sites, what would the people who are making bets there be doing with their money? If we take it as a reasonable proposition that most of the players are young men, could we reasonably expect them to do something prudent with that money? Perhaps save it?
Well, young men may be foolish, but they are smart enough to know that putting money into savings is, these days, a loser’s game. And why is this? Because the Federal Reserve has lowered interest rates to zero and kept them there during a big part of these young men’s lives.
The Fed gambled that zero percent interest rates would stimulate the economy back to robust growth. The Fed lost that bet. What it has done, instead, is stimulate the stock market.
But putting your money there, of course, is not gambling.
Geoffrey Norman, a writer in Vermont, is a frequent contributor to The Weekly Standard.
