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The Network Effects of recent DraftKings and FanDuel lawsuits

A new movement has come to the forefront in the spectrum of fantasy sports. Traditionally, people join leagues with people that they know and draft players on to a team for an entire season. However, with new websites such as DraftKings and FanDuel, people can draft their own teams every day, all one has to do is pay some variable entry fee. Recently, the New York Attorney General came to the conclusion that these sites represent a form of illegal gambling. It is now outlawed by the states of New York and Nevada.

In my opinion, it is a bit hypocritical of those who believe this is more illegal than other forms of fantasy sports. Many full season fantasy leagues also have cash prizes, and are not deemed illegal. In fact, many such policymakers probably play in full season leagues with cash prizes, or they possibly play DraftKings and FanDuel and probably lose. That just goes to show these site are purely luck based.┬áSince New York and Nevada have both outlawed these sites, there has been some instabilities in the market. This is a multi-billion dollar industry that the government is interfering with. As a result, network traffic is being shifted, or in this case is diminishing. In the long run, this will only lead to more restrictions on people’s ability to play fantasy sports, so that innocent march madness pool that you do with your office will soon become illegal.


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