As Lesley Eccles addresses Holyrood...
FanDuel boss calls for state regulation of fantasy games
Mr Eccles (pictured), who founded FanDuel in Edinburgh in 2009 with a group of colleagues, said state intervention is the only way to ensure consumers can trust the fantasy sports industry, which is facing a federal criminal probe.
There has been a clamour for control of the industry following allegations of so-called “insider trading” by an employee of rival firm DraftKings using information to win a $350,000 prize on FanDuel. Questions have been raised about the legitimacy of fantasy games and whether they breach the government’s strict online gambling prohibition. The FBI is among those looking at the claims.
Experts in the industry have called for either self or government regulation amid a growing media frenzy around the sector which has led to television advertising bans and orders by some states for the games companies to halt their operations unless they obtain a licence.
Mr Eccles said a plan announced this week by the industry’s trade group to police itself with an outside control board is a move in the right direction but does not go far enough.
“Consumers want a higher level of protection,” he said in an interview. “They need to know it’s fair, that the information is protected. If the consumer doesn’t trust the industry than the business doesn’t exist.”
He believes that laws are required to control the flow of cash and those who play the games. FanDuel is expected to distribute Mr Eccles’ views to customers.
Both FanDuel and its main rival DraftKings deny any wrongdoing and the latter said the “insider trading” incident was actually an accidental leak of information. The companies say they are classed as “games of skill” and are therefore exempt from the ban on online gambling.
Mr Eccles told a seminar in Edinburgh last month that FanDuel was one of the top five advertisers on US television. However, this has drawn the attention of critics of the sector.
Business in the Parliament Conference
Mr Eccles’ Fofar-born wife Lesley (above), who is EVP marketing and acquisitions for the company, said the US-focused company would be launching games in the UK.
In an address to the Business in the Parliament Conference at Holyrood, she outlinied how the company had grown from a base at Edinburgh university in 2009 into a business now paying out $2 billion in prize-money.
She said the company had targeted North America where most men aged between 18 and 34 play fantasy sports.
Outlining how the company raised capital she said UK investors “didn’t get it”and felt there was too much of a risk.
She admitted, half-jokingly, none of the five founders initially understood marketing and that she “knew nothing about sport”, but the company has now raised more than $300m from investors.
She said that every time she gives a presentation she has to update the numbers on employment. The company now has staff in Edinburgh, Glasgow, New York, Orlando and California.
First Minister Nicola Sturgeon said it was vital for Holyrood and the business community to work together to achieve their goals. She also said it was a priority of government to encourage and help more women become entrepreneurs.