Yahoo logo outside company building

Yahoo and its flailing DFS site to be bought by Verizon Communications

Verizon Communications has just announced plans to buy out Yahoo for $4.8 billion dollars. Of course, this means the Yahoo daily fantasy sports site is about to get new management.

Yahoo daily fantasy has recently been floundering in comparison to other DFS sites on the market. The planned acquisition may (or may not) help it out.

In 2015, Yahoo made $5 million from its daily fantasy sports venture. This may seem good at first. Now compare that to how DraftKings and FanDuel made $3 billion in the U.S. last year. You can see that Yahoo daily fantasy sports simply isn’t in the same league as these DFS giants.

Fair Play on Yahoo…

Screenshot of Yahoo Daily Fantasy Sports Fair Play

Ben Collins argues on the Daily Beast that Yahoo’s upfront commitment to fair gameplay is why they have been struggling:

“Part of the differentiator with Yahoo was that it was actually doing ethical things with its product.

“DraftKings and FanDuel were notorious for allowing high-end bettors to saturate the market with almost every conceivable pick, guaranteeing they’d eventually win and ripping off casual players.”

Yahoo’s Fair Play rules include:

  • A 1% user entry limit on all contests.
  • Stopping players from using scripting tools to upload or edit entries.
  • Labelling highly experienced players as Veterans, so you know who you’re up against.

This is in addition to deposit and playing limits. The majority of daily fantasy sports sites have this in place as a gambling awareness initiative.

Next Steps for Yahoo Daily Fantasy

What Verizon plans to do with Yahoo Daily Fantasy Sports is currently unclear. The deal is expected to go through in early 2017, so it’ll be a while before any significant changes occur.

It could be the case that Yahoo daily fantasy is no more after the company changes owners. On the other hand, Darren Heitner has argued on Forbes that Verizon could see the benefits of the site. They may boost Yahoo into a key player on the DFS scene:

“Through its massive database of customers, Verizon could easily push Yahoo fantasy applications, acquiring new users and enhancing advertising revenues.”

Nice Guys Finish Last?

New York State Attorney General Eric Schneiderman

“New York Attorney General Eric Schneiderman banned DFS sites from operating in the state this January”

There’s also an argument to be had in favour of Yahoo’s forethought in being transparent with DFS players.

DraftKings and FanDuel have both been suffering in the U.S. lately. This is due to legal rulings about the nature of daily fantasy sports as a game of chance or skill. Online gambling is illegal in the States, so each legislative ruling of chance is a death knell for the industry.

Note: this isn’t an issue in the UK as online gambling is perfectly legal here!

U.S. legislators have cited the operators’ failure to flag up experienced players as a reason for making DFS illegal.

New York Attorney General Eric Schneiderman banned DFS sites from operating in the state this January. In June a bill passed to regulate it as a legitimate game.

Schneiderman spoke to PBS Frontline on the issue of experienced players earlier this year:

“If there are a small number of professionals using computer scripts so that they can quickly move hundreds of lineups at a time, based on the latest breaking information about player injuries [etc.] they have a huge advantage over the casual player.”

DFS is now becoming more heavily regulated in the States. In this respect, the honest Yahoo could pull ahead of its competitors as a viable daily fantasy site.

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