Latest / Bloomberg Intelligence / DreamCo's Correia on NY Vote to Legalize Fantasy Sports (Audio)

Transcript

DreamCo's Correia on NY Vote to Legalize Fantasy Sports (Audio) · Bloomberg Intelligence

• 0:02
  Speaker 1: Global business news twenty four hours a day. If Bloomberg
• 0:05
  Speaker 1: dot com, the Radio plus mobile app and on your radio.
• 0:08
  Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
• 0:13
  Speaker 1: I'm Charlie Pelot. Forty two minutes to go. Ahead of
• 0:15
  Speaker 1: the close on a Monday, stocks are rallying and this
• 0:18
  Speaker 1: update is brought to you by Sector Spider e t
• 0:21
  Speaker 1: F S. Why by a single stock when you can
• 0:24
  Speaker 1: invest in the entire sector of visits sector sp t
• 0:27
  Speaker 1: r S dot com or call one six Sector e
• 0:31
  Speaker 1: t F SMP five hundred Indecks jumped the most in
• 0:35
  Speaker 1: four weeks after the latest polls showed the UK campaign
• 0:38
  Speaker 1: to remain in the European Union is gaining ground before
• 0:41
  Speaker 1: Thursday's referendum. The SMP up seventeen points to two thousand
• 0:46
  Speaker 1: eighty eight, a gain of nine tenths of one percent.
• 0:49
  Speaker 1: Nastack up fifty two a gain of one point one percent.
• 0:53
  Speaker 1: Down industrials hire by one percent. And now let's head
• 0:56
  Speaker 1: over to the first Word Breaking news desk for today's
• 0:59
  Speaker 1: afternoon call. Here is Bill Maloney. Good afternoon, Charlie. That's right.
• 1:03
  Speaker 1: Gained in US stocks today as those brakes, it fears
• 1:06
  Speaker 1: fade over. In Europe, the UK, France, Germany and Spain
• 1:10
  Speaker 1: all gained three percent or more back. In the USC,
• 1:13
  Speaker 1: sp cash traded back up of its fifty day moving average,
• 1:17
  Speaker 1: and the small cap six hundred climbs eleven points. The
• 1:20
  Speaker 1: US ten yield at one point six seven percent nine
• 1:23
  Speaker 1: out of tenness to be sectors are higher lit by
• 1:25
  Speaker 1: gains and energy industrials and consumer discretionary only utilities fell down,
• 1:31
  Speaker 1: Transports rise nineties six and as a biotech game thirty three,
• 1:34
  Speaker 1: and the vix is lower by ten percent down. Leaders
• 1:38
  Speaker 1: included Boeing, Intel, End, Goldman Sachs, and another news Walmart
• 1:41
  Speaker 1: to buy a five percent stake in JD dot Com
• 1:44
  Speaker 1: as part of a Chinese deal. Live from the First
• 1:47
  Speaker 1: Breaking News desk on Bill Maloney. Charlie, all right, thank
• 1:49
  Speaker 1: you very much, Bill Maloney, and you're live breaking news
• 1:52
  Speaker 1: over your Bloomberg type squawk sq You a w K
• 1:56
  Speaker 1: on your terminal. I'm Charlie Poddic. That's Bloomberg Business Flash.
• 2:01
  Speaker 1: You're listening to Taking Stock with Kathleen and pim Box
• 2:05
  Speaker 1: on Bloomberg Radio early on Saturday. Over the weekend, the
• 2:10
  Speaker 1: New York State Legislature they passed a well, they tried
• 2:14
  Speaker 1: to pass a bill that we've signed into law would
• 2:17
  Speaker 1: change the entire landscape of fantasy sports. New York State
• 2:22
  Speaker 1: Senate passing Senate Bill eight one five three to regulate
• 2:26
  Speaker 1: interactive Fantasy Sports contest. A companion bill had been previously
• 2:31
  Speaker 1: passed in the State Assembly. Here to tell us a
• 2:34
  Speaker 1: little bit more about it and the repercussions for the
• 2:37
  Speaker 1: fantasy sports business is Jay Koream. He is the founder
• 2:41
  Speaker 1: and owner of Dreamco Design. He is the author of
• 2:44
  Speaker 1: the book Daily Fantasy Sports, and is a member of
• 2:48
  Speaker 1: the Legislative Affairs Committee for the Fantasy Sports Trade Association. Jay,
• 2:52
  Speaker 1: thank you very much for being with us. Thanks for
• 2:54
  Speaker 1: having me. Now, there seems to be a bit of
• 2:56
  Speaker 1: a contradiction because, as I said, uh, this bill passed
• 3:01
  Speaker 1: by the Senate, and then there's the companion bill it
• 3:04
  Speaker 1: was previously passed by the State Assembly. Um seems to
• 3:08
  Speaker 1: contradict what the New York Attorney General Eric Schneiderman issued
• 3:12
  Speaker 1: that season desist order at last November. What exactly is
• 3:15
  Speaker 1: going on here in the world of fantasy sports business. Sure, so,
• 3:18
  Speaker 1: there's no doubt about it. It was definitely a rebuke
• 3:22
  Speaker 1: and one that was good for the industry and for
• 3:25
  Speaker 1: consumers on on the business side and with h you know,
• 3:28
  Speaker 1: consumers because they're going to have more options in terms
• 3:31
  Speaker 1: of how and where they play. So fantasy sports has
• 3:34
  Speaker 1: been around for decades. People have been playing in season
• 3:37
  Speaker 1: long leagues and whatnot. Daily fantasy sports within the last
• 3:40
  Speaker 1: twenty four months has ramped up as an industry. It's
• 3:43
  Speaker 1: quite large. There are fifty seven million people in North
• 3:45
  Speaker 1: America that play fantasy sports in some capacity. And daily
• 3:50
  Speaker 1: fantasy sports really caught on last year. A lot of
• 3:52
  Speaker 1: people recall seeing ads from FANDUL and Draftings. So New
• 3:56
  Speaker 1: York Attorney General is really the one that thrust it
• 3:59
  Speaker 1: into the spot light as having a negative opinion of
• 4:02
  Speaker 1: the industry and considering it nothing more than a form
• 4:04
  Speaker 1: of gambling. So on the federal end, we have what's
• 4:08
  Speaker 1: called UIJAH. It's essentially a car about so that operators
• 4:13
  Speaker 1: like vandel and draftings could exist. Fantasy sports are looked
• 4:16
  Speaker 1: at as games of skill. However, individual states they can
• 4:20
  Speaker 1: choose what is gambling and what's not. Uh, and the
• 4:23
  Speaker 1: Attorney General in New York thought that it was uh,
• 4:26
  Speaker 1: you know, gambling and it was not a skill based
• 4:28
  Speaker 1: game and every state they determined what the word gambling
• 4:32
  Speaker 1: means in their states. So that's that's the interesting side
• 4:34
  Speaker 1: of it. So DDE. This is so interesting though that
• 4:37
  Speaker 1: this bill passed by the New York State Senate to
• 4:41
  Speaker 1: regulate interactive fantasy sports contest a companion bill the previously
• 4:45
  Speaker 1: passed in the state Assembly. But this is a big deal. Uh.
• 4:48
  Speaker 1: They started debating Friday night, they went into the wee
• 4:50
  Speaker 1: hours of the morning. They didn't vote till to a
• 4:53
  Speaker 1: m Uh, this passes. What has stepped up the urgency
• 4:57
  Speaker 1: And to what extent is this a win for Eric Schneiderman,
• 5:00
  Speaker 1: next Attorney General? How much is it a win for
• 5:04
  Speaker 1: the big fantasy sports players. So the fight in New
• 5:08
  Speaker 1: York has been going on since the Attorney General came
• 5:11
  Speaker 1: out and said that this is nothing more than gambling
• 5:14
  Speaker 1: and we need to do everything we can to shut
• 5:15
  Speaker 1: down Vanduel, Draft Kings and any other operator. So it's
• 5:19
  Speaker 1: not a new thing. However, they did, you know, the state,
• 5:23
  Speaker 1: the state legislator did want to get it done prior
• 5:25
  Speaker 1: to the session ending so that we didn't criminalize people
• 5:29
  Speaker 1: that are playing fantasy sports for money. And there was
• 5:31
  Speaker 1: a similar issue unfolding in Illinois as well. So it
• 5:35
  Speaker 1: even though it had the has the takeaway of this
• 5:38
  Speaker 1: just came up, just happened. This battle has been going
• 5:41
  Speaker 1: on for quite a while. Uh and there are three
• 5:43
  Speaker 1: core principles at the Fantasy Sports Trade Association and Vanduel
• 5:48
  Speaker 1: DraftKings as well, we're really looking for and trying to
• 5:50
  Speaker 1: make sure we worked end roads within the state to
• 5:53
  Speaker 1: have happened. We want to make sure that fantasy sports
• 5:55
  Speaker 1: are considered a game of skill. We're fine with basic
• 5:57
  Speaker 1: consumer protections, but we also needed to make sure that
• 6:00
  Speaker 1: there was a fee structure put in place that wasn't
• 6:02
  Speaker 1: going to, you know, be the death sentence for a
• 6:05
  Speaker 1: lot of small businesses or create a duopoly. So there
• 6:08
  Speaker 1: were a lot of moving parts behind the scenes that
• 6:10
  Speaker 1: were unfolding over the last few weeks to get the
• 6:12
  Speaker 1: bill where it is today. Can you give us an
• 6:15
  Speaker 1: idea of how much, for example, draft kings brought in
• 6:19
  Speaker 1: from user fees because that seems to be the big
• 6:22
  Speaker 1: money maker there. Yeah. So the way that these operators,
• 6:26
  Speaker 1: these fantasy sport operators make money is they can they
• 6:30
  Speaker 1: keep a percentage. So let's say there's a ten man
• 6:33
  Speaker 1: uh ten dollar contest. It's a hundred dollars total, Well,
• 6:36
  Speaker 1: ninety would be part of the prize pool, and they
• 6:37
  Speaker 1: would keep ten dollars, you know, collectively. What the individual
• 6:42
  Speaker 1: companies are doing, it varies what you're going to hear
• 6:44
  Speaker 1: from FANDUL or Draftings. However, they have taken hundreds of
• 6:47
  Speaker 1: millions of dollars over the course of time and deposits.
• 6:50
  Speaker 1: So it certainly is you know, substantial. Uh, and you know,
• 6:54
  Speaker 1: to some extent, it's not a surprise the government wants
• 6:57
  Speaker 1: to get involved because it thinks it can it can
• 6:59
  Speaker 1: cut into I don't have the specifics in front of me,
• 7:01
  Speaker 1: but I do actually have a chapter dedicated to the
• 7:03
  Speaker 1: financials in the book. Just really quick, think about ten
• 7:06
  Speaker 1: seconds left. How many people were betting on the Big
• 7:09
  Speaker 1: Game last night? Uh? The sports betting and fantasy sports
• 7:13
  Speaker 1: very different. Yeah, there are two very different things. They
• 7:15
  Speaker 1: shouldn't have been doing anything like that when it comes
• 7:18
  Speaker 1: to fantasy sports. Both vandel and Draftings definitely have interest
• 7:21
  Speaker 1: in going public. So we'll say, Jakorea, thank you so much.
• 7:25
  Speaker 1: Founder and owner of Dream Code Design, he's also the
• 7:29
  Speaker 1: author of Daily Fantasy Sports and a member of the
• 7:33
  Speaker 1: Legislative Affairs Committee for the Fantasy Sports Trade Association on
• 7:38
  Speaker 1: Kathy Hayes along with pim Fox, taking Stock, brig Radio
• 7:46
  Speaker 1: coming up on taking stock. Facebook has its annual shareholders
• 7:50
  Speaker 1: meeting and Peter til He's gonna stay on the board.
• 7:54
  Speaker 1: We're gonna find out more about the future of Facebook
• 7:57
  Speaker 1: next