Over the past 18 months, the daily fantasy industry has exploded and become a business worth hundreds of millions of dollars. The two many companies at the forefront of the industry are FanDuel and Draft Kings. The two companies launched aggressive advertising campaigns that have costed more than $100 million for the start of the NFL season in hopes of creating new business for the biggest sport in the fantasy industry.
Daily fantasy operates in a fashion similar to online poker, a craze that took over the internet in the mid-2000s. To play daily fantasy, people pay entry fee into contests against other people. The daily fantasy sites take a percentage of the fee as a vigorous fee of playing. From there players select their lineup using a salary cap system that forces players to assembly the best roster on a budget. After the days games have been played, the players selected statistics are calculated for points. From there a winner is determined, and they walk away with a large sum of money.
Despite the financial success of the daily fantasy industry, questions have been raised by the media and government about the legality of daily fantasy. In 2006, the United States Government launched the Unlawful Internet Gaming Enforcement Act. The act was targeted at regulating the internet poker craze, but ruled that fantasy sports are a game of skill and not luck. The distinction or loophole as media members have called it, have allowed for the creation and exploitation of daily fantasy sports industry. Many people within the media and government are calling for further government regulation of the daily fantasy industry that has been referred to as legalized gambling.
In early October, media outlets reported a story where an employee from Draft Kings used the information and knowledge gained from the site’s database to enter a FanDuel contest and win a six figure purse. On October 7th, FanDuel released a page and a half public relations statement about the incident. I will be reviewing the press release for its objectives, techniques used and overall effectiveness.
FanDuel opens its release by addressing the reports previously outlined in its first sentence. In the second sentence of the opening paragraph, FanDuel articulates the importance the site places on trust between the site and its users. FanDuel continues by stating that any potential game integrity issue is a serious issue. FanDuel’s object is simply, regain trust by honestly stating how important trust is to their business. If the people believe FanDuel is untrustworthy they will take their business and money elsewhere, which will hurt any FanDuel stakeholders. Through this paragraph, Fan Fuel is attempting to manage its relationship between their users.
In the second paragraph, FanDuel uses weak language to convey the sense that an unfair advantage was not gained by the winner. FanDuel maintains that the game’s integrity was not compromised and the winner won fairly. The language, “Based on everything we know thus far, there is no evidence indicating that the integrity of FanDuel’s contest was in any way compromised,” is not very convincing. The statement appears to be intentionally left open enough so that they can change their stance if further evidence is found. The problem with this statement is that the information that the Draft Kings employee used has never been made public. The public does not know what the information was and if it had indeed been made public by NFL teams and media. By not releasing what information may have been used, the public has to trust FanDuel without any evidence, that the information did not provide any unfair advantage. FanDuel’s objective was to ensure the public that the integrity of its games has not been compromised. It is fair to say, that FanDuel did unsatisfactory job of accomplishing its goal.
In the second sentence of the second paragraph, FanDuel reiterates the importance of trust with its users. The sentence introduces the third phase of the conflict management life cycle by introducing a reactive plan. FanDuel then outlines three bullet points that address how they will ensure their games integrity and maintain trust with their users.
The first bullet point, bans any employee from FanDuel from playing any daily fantasy games for money. FanDuel announces it will ban any employees of any other daily fantasy site from playing at FanDuel. The plan outlined by FanDuel addresses the problem that has been reported by the media. However, they do not state how or when they plan to execute this plan. As good as it sounds on paper, I am sure people are skeptical of how FanDuel will accomplish this.
The second bullet point’s objective is to rebuild trust with its users. FanDuel announces it has hired Michael Mukasey, a former federal judge and attorney general to review its internal controls, practices and standards with his law firm. Mukasey was given freedom and authority to review any other of the organization and will provide recommendations to strengthen FanDuel. The objective of this paragraph is achieved as the actions of FanDuel match the interest of the public. Through taking action, FanDuel helps build trust with its users, managing the relationship and has now developed a strategy to benefit its stakeholders.
The third bullet functions in the same matter of the second. FanDuel announces it has hired a law firm to provide on-going advice in attempt to ensure the integrity of the game. Provided both law firms do what they have been hired to do and are not used by FanDuel as names to improve public relations, they achieve their objective of introducing a trustworthy reactive plan.
However FanDuel raises a lot of questions with the last sentence in the third bullet point. “We look forward to speaking with regulators across the nation about how to define the right set of rules for our industry as it continues to grow.” The big problem with this statement is that daily fantasy does not have a regulatory body within the government. FanDuel uses this sentence to build trust, however the wording of the sentence makes them appear untrustworthy because there is no regulatory body. Had FanDuel said they want to go to the government to set up an independent regulatory body, people would have a much greater level of trust. Especially if the daily fantasy industry would be under constant monitoring by a regulatory government body.
The press release concludes with three sentences. The first outline how fast FanDuel is growing as a company. The second indirectly thanks fans for embracing fantasy sports and being the base for its business. The final sentence again reiterates the goal of the stakeholders to continually grow and the importance trust in their clientele base is when dealing with the integrity of their daily fantasy games.
Overall, the press release is moderately successful. The reactive plan is a smart and well designed to address the previous flaw in their system. However trying to sneak government regulation past any reader is not trust and helps damage the relationship between stakeholder and clientele.
Author’s note: No citation information was given or required for this assignment. All supplement research came from the Sports Illustrated Vault podcast from Friday November 13, 2015 entitled “The Vault Presents: Inside the DFS debate”