December 15th, 2009

Industry Leaders Call Out Fidelity

Tuesday, December 15th, 2009

We’ve already made our feelings known about the decision by a Texas branch of Fidelity Investments dumping four employees after incorrectly interpreting fantasy football as gambling, and World Fantasy Games CEO Jeffrey Thomas pointed out that the firm should prepare for litigation. Other industry veterans are also criticizing Fidelity’s decision.

Fantasy Sports Trade Association president Paul Charchian called it “troubling” that Fidelity mislabeled fantasy as gambling.

“Congress recognized the distinction between fantasy sports and criminal sports gambling, and wrote exclusionary language around fantasy sports play,” Charchian said, referring to the Unlawful Internet Gambling Enforcement Act of 2006. No fantasy sports company has been the subject prosecution for gambling. No person has been the subject of prosecution for gambling related to fantasy sports participation.”

So, maybe Fidelity will choose to take the stance that although fantasy sports don’t legally qualify as gambling, they could be perceived as such by potential customers and that such a perception could hurt the company. Well, CDM Sports founder Charlie Wiegert sees potential for this action to produce the opposite result.

“With over 25 million people playing fantasy sports games in our country, and probably many of them Fidelity customers or potential customers, this is a tough stance for them to take,” Wigert wrote Monday in his Godfather of Fantasy Sports blog. “They run the risk of many of their customers closing their accounts and moving them to other companies, as many fantasy football players would not like to do business with a company that feels they are gamblers or misinterprets the laws of our government.

“Interesting because some might believe it’s more like gambling when their customers are investing funds with them! I for one will be canceling any account I have with fidelity on Monday!”

Whatever the outcome, Fidelity’s firings have no doubt made a much bigger issue out of employees’ fantasy participation than there ever would have been otherwise.

Full FSTA reaction —

Charlie Wiegert’s blog post —