Mark Cuban to politicians: Good luck killing fantasy sports

The death of the fantasy sports industry has been greatly exaggerated.

Yes, certain politicians such as New York Attorney General Eric Schneiderman and California Assemblyman Marc Levine have sought to make a name for themselves by promoting efforts to ban daily fantasy in their respective states. They are wrong and misguided.

But the larger story — and the one that’s not being told — is that the industry has embraced sensible regulation, and that lawmakers are taking notice. In state after state, laws are moving forward to clarify the legality of these games and allow the 50 million players to continue playing with some reasonable restrictions.

As an investor, I don’t make a lot of money following the herd. My job is to discern the difference between signal and noise. Right now, the noise is that fantasy is dead; the signal says otherwise.

To prove the point, I’ve invested in two companies within the past year — Sportradar and FantasyLabs — that operate in the fantasy sports space.

My rationale is twofold: First, fantasy sports create exponential value for the sports, entertainment and tech industries. They are complementary to just about every entertainment product I enjoy and that we, as Americans, collectively love. We are witnessing the next generation of entrepreneurs building small businesses across the country, creating jobs and new technologies, while adding value to the sports and entertainment industries. This innovation should be preserved and protected.

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Second, fantasy sports is a game of skill. Fundamentally different from gambling. With fantasy sports, just like in actual sports, a player’s success or failure is determined by their skill.

So let’s talk about what it means to be a game of skill because it’s something that’s misunderstood, and it’s really quite simple. I’ll use my own experience owning the Dallas Mavericks to make the point.

Donnie Nelson and my team manage the Mavericks in the same way that most sophisticated people play daily fantasy sports — they collect the data, analyze it and make predictions about what it means. We succeed in the same way fantasy players succeed on daily fantasy sports sites — by making accurate predictions.

We scout, test, research and execute; it’s not that different than your typical daily fantasy player. If it sounds easy, then I suggest you not play because you don’t get it. It takes work and, yes, it takes skill. Like any complicated endeavor, it is equal parts art and science. More often than not we fail, but when we succeed, the rewards justify the sacrifice. The same principle applies to fantasy sports. And that’s why fantasy sports is growing so fast. That job, the job I love and that my team performs every day, is every sports fan’s fantasy.

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That’s why soon more American adults will play fantasy sports than play actual sports. Given the popularity, and the advertising, it’s natural politicians would take notice — they always do. That’s why at least 20 state legislatures have taken up or are expected to take up fantasy sports legislation this year. Bills are already moving through legislatures in California, Indiana, Virginia and Florida that will clarify the laws and regulate fantasy sports.

There could be naysayers and more people who try to restrict access to fantasy games. Here’s what I have to say that: Good luck. Good luck standing in the way of the entire sports-loving population that enjoys the camaraderie that comes with playing fantasy sports. Good luck telling these folks that they are criminals for doing something that is its own American national pastime. And good luck telling us that we are incapable of deciding for ourselves what hobbies we can participate in.

Fantasy sports is here to stay, and that is a good thing.

Mark Cuban is an entrepreneur and owner of the NBA's Dallas Mavericks. He is an investor in Sportradar and FantasyLabs.

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