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Friday, Jan 27, 2023
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Mickey Mouse to House Bet

Here’s a question. Do you think Walt Disney might be rolling in his grave? I’m sure you remember the man, he gave birth to loveable Mickey Mouse and revolutionized Hollywood animation in 1937 with his classic hit “Snow White and Seven Dwarfs.” And for decades his Burbank studio spun out family-friendly pictures, from “Fantasia” and “Peter Pan” to modern classics such as “The Lion King” and “Frozen.” So, I wonder, what would he think of his successor Robert Iger rolling the dice this month with a $250 million investment in DraftKings Inc. Actually, it’s a pretty safe bet. (See article page six.) You might not be a fantasy sports fan or listen to morning sports talk radio, so if you don’t know about the DraftKings phenomenon, let me quickly fill you in. It’s a website that allows players to bet real money on sports fantasy teams assembled on a per-game basis. It’s an outgrowth of the fantasy leagues that took off after the advent of the Internet, which allowed individuals to assemble teams by “drafting” players in various sports, such as Major League Baseball, the NFL or NBA. Software would then calculate how well the teams performed based on the player’s performance on the field. I know all about this, because over the past decade while I worked at our sister paper, the Los Angele Business Journal, there were fanatical reporters who formed leagues and followed their teams throughout the season. The payoff for the winner was taken from a prize pool, which I can assure, given reporters’ pay, was small. But the folks at DraftKings, a Boston startup, and its rival FanDuel Inc., had a much better idea, at least about making money. Instead of forming teams for fantasy leagues, why not allow players to form teams for single games? That could be the basis for single-game bets – placed on the Internet, across state lines and seemingly in violation of the federal prohibition on Internet gambling. But it’s ingenious. The 2006 law called the Unlawful Internet Gaming Enforcement Act that prohibited Internet gambling carved out an exception for fantasy sports. Of course, that law didn’t anticipate the biggest player in the space, FanDuel, which was founded in Scotland in 2009, or its rising upstart DraftKings, which one year after its founding in 2012 claimed more than 1 million users. And consider DrafKing’s revenue for last year, which it released in January: $40 million. OK, so you’re not blown away, but that figure was up from $3 million the prior year. So there you have it. While the government has prosecuted companies that have attempted to offer Internet gambling for traditional games, such as poker, FanDuel and DraftKings are in the clear. I’m not making any judgments here. And I will concede that building a winning fantasy sports franchise takes passion, time and skill, but a bet is a bet. And Disney is all in. Get used to it, Walt. • • • I think VICA President Stuart Waldman loves playing the troublemaker. Why do I say that? Well, there was quite the kerfuffle last week in the Valley and it revolved around Florida Gov. Rick Scott’s talk to business leaders at the Leaders Forum hosted by VICA, more formally known as the Valley Industry & Commerce Association. It came down to this: VICA is all about promoting local businesses by improving the business climate, mostly through regulatory reform and lobbying in City Hall and Sacramento. And Scott is a governor from another state whose visit to the Los Angeles area was all about poaching business. So why would VICA give Scott a forum to promote his state and argue why it has a better business climate than California? Waldman told our reporter Mark R. Madler in a story on page three of this edition that his group brings in people “that our members want to hear from.” Other speakers have included L.A. Mayor Eric Garcetti, former Dodgers owner Frank McCourt and GOP Senate candidate Carly Fiorina. Notice anything similar about this group, as in they are all promoting moving businesses to other states? Well, of course not. But Waldman is a highly astute, politically tuned-in leader and he knew exactly what he was doing. Scott’s talk raised eyebrows and even drew an L.A. Times story and an editorial from the L.A. Daily News, which doesn’t regularly editorialize on business issues. In short, it drew attention to the consistent litany of complaints that local businesses have about doing business in California. But this time, the tune was carried by an out-of-state governor, whose statements at a VICA event actually drew some attention.

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