The daily fantasy sports industry is eyeing a breakout season as NFL games begin. And its two dominant companies, DraftKings and FanDuel, are touting lucrative opening week prizes to try to draw more customers as more competitors pop up. (Stephan Savoia/AP)

Sports must reject fantasy sleaze

As you read my commentaries, you’ll quickly realize that I loathe companies that try to exploit sports for money grabs. Sometimes, they’re teams that screw fans with high ticket prices and low performance, such as the 49ers. Sometimes, they’re media monoliths, such as ESPN, that claim to be committed to journalism but only as it selectively suits their sports business partnerships and bottom line. Sometimes, they’re amateur content sites, such as (not worthy of mentions), that pay pennies to post-frat-boy trainees as they either make stuff up or crib credible articles so their editors can saturate the Internet with more theft-by-aggregation.

And sometimes, they are daily fantasy sports operations that looked sleazy from the moment they started pummeling our senses with ads — on television, on the web, in stadiums and arenas, in BART stations, even above public urinals.

If I could properly aim without peeing on my shirt, I’d soak the DraftKings and FanDuel branding with a robust drenching today. Taking advantage of a human sickness known as compulsive gambling — and a loophole in a federal law that somehow doesn’t see fantasy sports as a form of gambling — these newcomers have built multibillion-dollar empires by offering us the chance to win big money every day on fantasy wagering in lieu of the season-long, $50 office pool.

This week, ever so predictably, the fantasy racket had its first major scandal. As the New York Times reported on Page 1, a midlevel DraftKings employee used data not available in the public domain to favorably set up his NFL fantasy team on rival site FanDuel, enabling him to win $350,000 in Week 3. This is tantamount to insider trading, which is easy to do in an unregulated industry that is hyperventilating as massive numbers of people — 57 million in the U.S. and Canada — participate this year in fantasy sports.

Even when the stakes are low, people immersed in the fantasy culture scare me. They are focused on a delusional game within the much larger context of an authentic game, more concerned about the Jacksonville tight end’s numbers than which teams actually win and lose and move up and down in the standings. Recently, I mentioned to a friend that Colin Kaepernick was having a horrendous season as a quarterback.

“I like him,” he said. “He got me points in the second half in Pittsburgh.”

I didn’t have the heart to tell him that Kaepernick’s three scoring plays this season, two passing and one running, all came in garbage time long after The Real Games were decided.

Now, like heroin to an addict, here come DraftKings and FanDuel to hook poor suckers like him. These cyber-bookmakers ask for an entry fee of up to $1,000 and promise as much as $2 million to a winner of a high-stakes pool, yet neither company has provided an official list of big winners because — all together now! — they aren’t regulated. The hope is that lawmakers will intervene and prohibit online fantasy for the same reasons online poker was banned in 2006. But I’m concerned this scandal might be a quickly forgotten blip. Why?

Because there’s too much money to be made.

And Big Sports wants a substantial chunk.

The very nature of gambling’s ills should make leagues and teams repel from all types, including fantasy. For decades, point-shaving scandals have made sports vulnerable to integrity breaches, and already, we’ve seen an example of how inside knowledge can poison the fantasy product. Why wouldn’t a dishonest athlete or team employee supply inside information for money? What stops a syndicate from having an athlete fix his performance in a particular game, or getting to a coach who controls how the ball is distributed and to whom? Pro sports shouldn’t be anywhere near fantasy operators.

But leagues and teams are literally in business bed with these companies, so eager to expand their bustling fortunes that they’ve lost all sight of the bigger ethical picture. It’s not a matter of who has a sponsorship association with one or the other. It’s who doesn’t.

DraftKings is funded with seed money from Major League Baseball — the same organization that issues Pete Rose a lifetime ban for gambling — and has sponsorship deals with 27 teams, including the Giants and A’s. FanDuel has sponsorship deals with the NBA and 14 of its teams, and DraftKings has deals with eight others, including the Warriors. The NFL has a three-year deal with DraftKings for its London audience and lets individual teams decide on their involvement, which allowed two of the league’s most influential owners, Dallas’ Jerry Jones and New England’s Robert Kraft, to invest big dollars in DraftKings. FanDuel has business ties with 16 NFL teams and DraftKings with 12, including the Raiders. The NHL, NASCAR, UFC and Major League Soccer also are in bed with DraftKings.

It was Big Sports, after all, that lobbied hard nine years ago for fantasy sports to remain legal. And Big Sports won’t be letting a little $350,000 hiccup stop the gravy train. MLB did express concern that a DraftKings employee was allowed to participate in a fantasy game, saying in a statement that it “prohibits its own players and employees from participating in fantasy baseball games where money or something of value is at stake, and did not know that the situation was different at Draft Kings.” That MLB never explored the potential conflicts before striking a deal is all you need to know about these leagues.

Make the big financial kill, then answer questions if necessary.

For now, the sports industry is in a holding pattern while the New York attorney general launches an inquiry. In an email, Warriors vice president of communications Raymond Ridder wrote: “At this point, with the limited information that we have, we plan business as usual with our sponsorship agreement with DraftKings.”

The 49ers? They have a fantasy deal with Yahoo, which is launching its own site to compete with DraftKings and FanDuel.

The sports media, too, are soiled by this story. ESPN, hypocritical to the last dollar, ignored journalistic principles in taking so much sponsorship money from DraftKings that the branding was splashed all over its programming and studio sets. Did network president John Skipper do any homework on that company — or was he blinded by profit madness as usual? Fox has hundreds of millions of dollars wrapped up in DraftKings, just as Comcast and NBC have invested mini-fortunes in FanDuel.

See where this is going?

They’ve all jumped into the sleaze pit and will ignore advice to climb out and disassociate. The only ripple came from ESPN, which, as usual, played both sides in announcing it would keep airing regular advertisements for DraftKings and FanDuel but that it wouldn’t allow the sites to sponsor particular shows. A few hours later, network anchor Lindsay Czarniak, obviously coached up, declared it a non-story on “SportsCenter.”

“It’s dead,” she said.

Sorry, corporate puppet, but this story is very much alive and not well.

Jay Mariotti is sports director and lead sports columnist at the San Francisco Examiner. He can be reached at jmariotti@sfexaminer.com. Read his website at jaymariotti.com.

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