The Fantasy Sports Industry Is Still Growing—Despite the Extra Regulations
The fantasy sports space continues to grow, despite the expansion of regulations on the sector at the state level. Here's an update on the industry, along with how associations are helping things along.
Didn’t it feel like fantasy football was everywhere a few years ago? Certainly the commercials were.
But here’s the thing that you might not have realized if you’re not a sports fan—it’s still everywhere, and it’s still growing. According to a June press release from the Fantasy Sports Trade Association, it generates $7.22 billion in revenue annually and counts 59.3 million players in the U.S. and Canada. Pretty solid numbers, right? FSTA President Paul Charchian certainly thinks so.
“The fantasy sports industry’s continuing growth demonstrates consumers’ passion for the hobby and their desire to play with friends and family,” Charchian said in the release. “We continue to see innovation that broadens the appeal of fantasy sports and data that shows tremendous gains in the scale of participation and economic impact.”
But a lot’s changed since the heady days of 2013 and 2014, when the activity started to hit a peak in mainstream consciousness. Since then, controversy hit in a big way, with the approach compared closely to gambling.
All the additional attention has led to an increased number of regulations at the state level.
Just recently, New Jersey launched regulations on the activity—complete with a 10.5 percent tax on winnings garnered by a company. They weren’t the first: According to Bloomberg BNA, 14 other states have taken steps to legalize the industry, with nine of those states implementing taxes or fees on operators. These regulations are generally new—when Virginia regulated fantasy sports in March 2016, it was the first state in the country to do so.
The surge in regulations was no accident, however—FSTA basically encouraged it by introducing its own model legislation designed to ensure that states had a starting point for regulations.
But the regulatory specter did create some uncertainty in the industry, especially as it ensured the advocacy game would take place in a variety of venues at once. Before the 2016 FSTA annual meeting, attendees were unsure of the way that regulations would affect the industry.
“I think a lot of people were walking in wondering if they were walking into a morgue,” Charchian told ESPN in January of 2016. “But one of the recurring themes I got from attendees was how happy they were that the energy and positivity and excitement that is sort of inherent in fantasy sports is all still there.”
Of course, not all fantasy sports companies have the reach of FanDuel or DraftKings, and last year, smaller players in the fantasy sports space created a group of their own, the Small Businesses of Fantasy Sports Trade Association, in an effort to maintain an advocacy voice in the regulatory efforts taking place in states around the country.
“We felt that a stronger voice was needed to speak on behalf of the small business owners of fantasy sports,” SBFSTA cofounder Alex Kaganovsky told Inc. last year.
At this point, some things are still in flux—while 15 states now have regulations signed into law, others have banned such play outright, and others still are trying to work out the details of any proposed legislation.
For now, though, most of the U.S. can get in on fantasy sports action if they’d like.
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