Casinos are quickly realizing how much revenue daily fantasy sports are generating, forcing them to open their ears, minds, and possibly checkbooks, to get in on the growing trend. DraftKings and FanDuel are currently dominating the daily fantasy sports world, and casinos are starting to see them as threats to sports betting.
One company offering a solution is Game Sports Network Inc., a startup based in New York, which has developed an app titled HotRoster. Without naming any investors, they claim to have raised $7.5 million to build the app, which can be licensed to casinos under a white label. The app would ideally be capable of hosting currently banned sports gambling contests, or any game of chance, should the laws change.
CEO Chuck Goldman, the former lead of Apple’s service enterprise services team, said HotRoster is not the company’s main focus, stating, “The core business is the platform we’ve build to enable institutional gaming houses, like casinos and media companies, who want to get into fantasy an opportunity to white-label and drive clicks to bricks, not bricks to clicks.”
HotRoster is different than other daily leagues you see on the internet, however. First, they built a compliance/verification system, to be seen as a corporate product intended to be sold to companies used to extremely rigid regulation. They are also toeing the line which separates fantasy from traditional gaming, in hopes of attracting the general casino audience.
Under the Unlawful Internet Gambling Enforcement Act of 2006, fantasy sports is considered a fantasy game of skill, mainly due to the fact there is no reliance on a single real-life competition. In addition, HotRoster’s user experience feels much more like a casino bet than playing in a fantasy sports league. The most notable difference is that instead of build a team via draft, players will predict the outcome of individual one-on-one matchups each week. Oddsmaker Kenny White, hired in as chief gaming officer will create 60 matchups per week, and the gambler will pick between four and 10 each week. The gambler then gets paid odds based on how many correct picks are made. Payouts begin at 10 to 1 for four correct picks, going up to 500 to 1 for 10 correct picks.
However, the more that these companies implement chance into their fantasy games, the higher the risk regulatory scrutiny may become an issue. Marc Edelman, law professor at Baruch College and a sports gaming expert, says the “continuum of chance” makes HotRoster straddle the line of true gambling more so than most other leagues on the market.
The Fantasy Sports Trade Association wants to do their part to establish a distinct separation and sports gambling. President Paul Charchian fails to see any fundamental issue with HotRoster in this regard. He claims “We’re really touchy about this subject, and I continue to be really vigilant about these games,” Charcian continues, “But this one to me feel like it’s probably OK.”
While dozens of potential challengers to FanDuel and DraftKings are lurking, Game Sports Network feels they’re different due to the team of executives and advisers on hand with a long industry track record. Former Nevada Gaming Control Board Chairman Mark Lipparelli joins the team as an adviser, although they have declined to name investors, they claim that all are wealthy individuals with backgrounds in gaming, technology, or finance.
In addition to football, the company is looking to release basketball as part of an updated app.
