From a Bloomberg View editorial:
In the past few weeks, the fantasy sports business learned it was facing an FBI probe and multiple other investigations. It also had its most prosperous weekend ever.
Daily fantasy sports – clearly a form of gambling, despite what practitioners say – should be subject to oversight just as other legal forms of wagering are. Regulators should ensure that the games are run transparently and with integrity. And then gamblers should be free to lose money on them fair and square.
The now-booming websites owe their existence to a loophole. In 2006, Congress banned most online gambling but carved out an exemption for fantasy sports sites.
The fantasy experiment that Congress enabled will work only if regulators – state and federal – put sensible rules in place to protect consumers.
Proprietors of daily fantasy sites should be licensed and regulated much as casinos are, to ensure their operations are transparent. The technology they use should be subject to audits. So should their safeguards against fraud and the misuse of inside information by employees. Actually, pretty much everything these sites do should be spelled out more clearly.