The NBA’s fantasy basketball partnership with Yahoo YHOO +2.76% is back for year three. However, one of its most innovative offerings is gone.
This year, Yahoo fantasy basketball is not offering any play-for-cash games. Instead, Yahoo is offering only a combination of free-to-enter leagues and custom private leagues.
Yahoo’s decision to scrap play-for-cash fantasy basketball marks a substantial step back from its previous position on the issue. The decision may in part be based on the preferences of new NBA commissioner Adam Silver, who unlike his predecessor is at least beginning to discuss the sports gaming issues publicly.Yahoo’s fantasy basketball partnership with the NBA got off to a rocky start two years ago when Yahoo placed the NBA.com logo on all the pages of its fantasy basketball website, including those related to its pay-for-play contests. However, almost immediately a representative of the NBA proclaimed that the NBA was ”not associated with Yahoo! Sports pro leagues, which included entry fees and cash prizes.”
Last year, Yahoo did a far better job of explaining the scope of its relationship with the NBA. Although Yahoo continued to operate pay-for-play leagues, it excluded the NBA logo from its pages that allowed users to register for its pay-for-play leagues. In addition, Yahoo! added a disclaimer to the bottom of all pages, stating that the NBA did not endorse the pay-for-play games.
This year, the pay for play games are gone entirely.
There are numerous reasons why Yahoo may have abandoned pay-for-play fantasy basketball. Business reasons may include questions about game popularity as well as direct return on investment. In addition, from a legal perspective, Yahoo games had been operating in a number of states where its games may have carried legal risk .
Nevertheless, the timing of Yahoo’s exit from the pay-for-play fantasy basketball market is somewhat surprising, as two NBA teams (the Orlando Magic and Brooklyn Nets) recently signed sponsorship agreements with the daily fantasy sports website Fan Duel: a website that operates contests with a somewhat higher risk profile than Yahoo’s full-season contests. In addition, Yahoo’s main rival in the fantasy sports hosting market, CBS Sports, continues to offer play-for-cash fantasy basketball contests.
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Marc Edelman is an Associate Professor of Law at the City University of New York’s Baruch College, Zicklin School of Business, where he has published more than 25 law review articles on sports law matters, including “A Short Treatise on Fantasy Sports and the Law.” He also provides legal and business consulting to a fantasy sports businesses. Nothing contained in this article should be construed as legal advice.
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