Yahoo Finance Exclusive: Why Sheldon Adelson is against daily fantasy sports
This week, the first week of a new NFL season, is the biggest of the year for companies like DraftKings and FanDuel, the platforms that offer a “daily” alternative to traditional “season-long” fantasy sports. This week is when new users sign up in droves.
But this season, there are more states where users can’t play DraftKings or FanDuel than there were one year ago. Amid widespread legal scrutiny after the two private tech startups flooded airwaves with $200 million worth of advertising, a few new states became unfriendly. (See where every state now stands on daily fantasy sports.)
One of those states was Nevada, where the Nevada Gaming Control Board decided that daily fantasy sports contests constitute gambling. Nevada did not rule daily fantasy sports illegal, just that the companies must apply for gambling licenses to continue doing business there. And that is something the companies are unlikely to ever do. “We have found that [an entry in a daily fantasy sports contest] is a wager,” Nevada Gaming Control Board chairman A.G. Burnett told ESPN, “and obviously, it’s on a sporting event, and DFS companies are in the business of accepting those wagers.”
Sheldon Adelson, CEO of Las Vegas Sands (LVS), is one of the most powerful businesspeople in Nevada. Adelson spoke exclusively to Yahoo Finance recently about his plan to build a new $1.9 billion football stadium and bring the Oakland Raiders to Las Vegas, and in that interview, the subject of daily fantasy sports came up. (See the full interview about the NFL stadium here.)
Adelson (it’s pronounced “ADD-elson”) explained why he is staunchly against the business. And his reasoning might surprise people.
What follows is a condensed transcript.
Yahoo Finance: Since the NFL owners will vote on whether the Raiders can move, have you tried to talk to owners and win them over? Might they object to you being an owner because you are in the gaming industry?
Sheldon Adelson: I’ve met with [Dallas Cowboys owner] Jerry Jones and I’ve talked to [New England Patriots Owner] Bobby [Kraft]. Bob is the chairman of the committee for relocation in the NFL. He’s in favor of it. It’s an old wives’ tale that they [the NFL] say gambling is no good. I’ve read that 28 of the 32 teams have interest in fantasy sports. Well, that’s gambling. So 28 teams are involved in gambling. [28 teams have cut marketing partnerships with either DraftKings or FanDuel.]
Well, that’s the whole argument going on right now: whether daily fantasy sports is gambling. And state by state gambling law has become a hotly contested issue because of these companies.
Listen, I’m in the business. I’m the largest company in the gaming business by market cap [That is correct—$44 billion at the moment] and I can tell you this: Daily fantasy sports is gambling. There’s no question about it. Anybody can play this, and they can gamble on it.
Some say poker is not gambling. Poker is gambling. They say poker is a game of skill. I don’t know how skill can apply to somebody shuffling a deck of cards and randomly giving them out to you. You don’t have any control over it. Can somebody bluff and can somebody place bets better than somebody else? Yes. But that doesn’t make poker a game of skill.
And look, I’m not against gambling, obviously. I know what’s gambling and I know what’s not gambling. And fantasy sports is gambling. I’m very much against it.
As you say, you are in the gambling business. So why are you against daily fantasy?
I think it exploits poor people. I was one myself. And I don’t want people that are exploitable to be exploited. I can make money in an honest way—as a form of entertainment. If people want to come and be entertained I’m very happy to provide that service. But why do I need it, the fantasy sports? We’re making money [without it]. I don’t need it. And I think it’s immoral.
Anyone can get addicted to it. You could do it in the bathroom, you could do it in your kitchen, you could do it anywhere, privately or publicly. You know, this Pokémon thing, I don’t know what it is, but as I understand it, people do it in public. They’re chasing pokémon in public. It’s like that.
I don’t want people to be incentivized to make it so easy to play on your cellphone. It gets young kids, just like marijuana.
The biggest victims of Internet gambling, and these fantasy sports that people can access from their cellphones, are children, college students of age, and poor and middle class people. I’m not against it just because it hurts children, it hurts a lot of groups. I don’t want to make money that way. I don’t want to make money taking from poor people. They don’t have anything to gamble. And when they do, they get in over their heads.
Many people would say that the real reason you oppose it isn’t about moral grounds, but because it’s business competition for you.
No. It’s not a financial matter. I’m a father, I’m a grandfather, i’m a responsible businessman, and I don’t want to exploit poor people.
Everybody thinks that because I’m wealthy, all I want to do is make more money. Yes, I want to make more money. But not from exploiting young people and poor people. There’s no principle that I would surrender in favor of money.
This is a moral issue. When we have somebody [in the casino] that we see needs to be treated, we stop dealing to people. I don’t have to hurt people to make money.
Might there be any money in it for you, though?
I have no idea. There must be some money in it, because 28 of the 32 NFL owners are involved in daily fantasy sports. So I have no idea if it would be a lot of money or a little money, but it wouldn’t make a difference to me. I wouldn’t do it, as a matter of morality.
It’s contrary to all the rules. My father was a gambler. He couldn’t stop going to the racetrack. He would bet on almost anything. I can’t say that he was a gambling addict, but I can say that he gambled a lot. And when he lost money, it caused friction in the family.
If people have one compulsive behavior, they typically have more than one. My own son likes to play this fantasy game. Kids his age easily get addicted to this. But since I’m in the business, I’ve prevented my son from getting addicted. I tell him it’s not good, and he understands. He doesn’t bet. He’s seen other kids in his school lose money on this. He likes the entertainment of the fantasy sports because he’s a sports nut.
What about selling space to daily fantasy companies in your casino? [One DFS company, USFantasy, did apply for a gambling license in Las Vegas and got one; the company will offer pari-mutuel daily fantasy sports contests at walk-up windows in some Las Vegas casinos, but not in any LVS properties.] There are now DraftKings lounges at certain NFL stadiums, such as Gillette and Arrowhead. Would you ever do that: designate areas for fantasy sports inside your casinos and share revenue, rather than oppose the companies?
Never. I’m not going to do that. I’m not going to do any form of fantasy sports in my casino.
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Note: Yahoo, the parent company of Yahoo Finance, offers a daily fantasy sports product.
Disclosure: The author’s father, a lawyer, does some legal work for Sheldon Adelson.
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite. Sportsbook is our recurring sports business video series.
Read more:
Here’s where every state stands on daily fantasy sports legality
FanDuel goes after ESPN and other season-long fantasy providers
DraftKings CEO shares what’s next after New York bill passes