NFBC To Begin Charging Compliance Fees In 2020

[Greg Ambrosius]

Rotisserie Baseball was invented in 1979 by Daniel Okrent and in the last 40 years the industry has grown to unimaginable heights. Never could Daniel Okrent, Glenn Waggoner or the other Founding Fathers have imagined an industry that included Daily Fantasy Sports, High-Stakes season-long fantasy sports or fantasy golf when they created this game in 1979. And they never imagined that this hobby would turn into a multi-billion dollar industry 40 years later.

But that’s what we have today, and while Okrent is disappointed that this little invention grew into a multi-billion dollar industry, it’s grown through innovation, creativity and the love of all sports by so many others. He gave sports fans the tools to be the owner, general manager and coach of sports franchises and others invented even better ways to play his original game in all sports. You could even say that DFS made it easier for states to pass legalized sports betting laws because pay-to-play fantasy sports had already become so accepted.

All of this has been good for the industry, which has gone from a niche hobby of 1 million players in 1989 to a mainstream game of skill played by more than 57 million people in North America. Sports fans have benefited, but so have sports leagues, sports networks and even the states in general.

Unfortunately, there is a cost to this growth and we are seeing some of that at SportsHub Games Network right now. We acknowledge the need for licensing, legislative action and administrative costs to keep this industry growing, but those costs are no longer marginal or inconsequential. They are getting bigger and bigger by the year, and demand more and more resources. As of 2020, we have currently paid hundreds of thousands of dollars in licensing fees and compliance costs, in addition to hiring a full-time compliance officer.

This has resulted in our licensure or registration in a dozen states and counting. Without these licenses and registrations, we couldn’t operate in Arkansas, Colorado, Indiana, Maryland, Mississippi, Missouri, New Hampshire, New York, New Jersey, Pennsylvania, Tennessee and Virginia, among other states. Since we’ve joined SportsHub Games Network three years ago, we’ve kept the prize payouts the same, eliminated all live Events Fees and ate these expenses.

So, starting on February 11th, we will add on a compliance fee to each new signup, ranging from $2 to $10. This is an expense we will share across the board with all live and online entries and for all size of entries from $50 to $1,700 because we all benefit from the licenses. I say that because without the licenses we’d have to exempt more than a dozen states and hundreds, if not thousands, of our players, which in turn would reduce the participation and the grand prizes across the board.

We are NOT reducing the prize payout percentages at all, as our high-stakes contests will still range from payouts of 80 percent to 95 percent. We are NOT adding Events Fees like some of our competitors do (up to $150 per live event). We are NOT exempting a dozen states. And we are NOT covering our entire licensing fees with the compliance fees; far from it.

But the small fee will allow us to pay some of the state licensing fees we now incur and it will be shared rather equally by our players. It’s not something we want to do, but it is something we NEED to do to keep adding state licenses and to keep the prize payouts where they need to be. Each year more states will add fantasy licenses (whereas there were no states doing that prior to 2016), so we must be prepared to pay up or leave those states.

Here’s the breakdown of our fees, with some incentives in place to save money:

** No compliance fees will be applied to any signups before Feb. 11th. Sign up now if you want to avoid those fees. These compliance fees will be added starting Feb. 11th for NFBC and NFFC as follows:

** $10 compliance fee for entries between $1,000 and $1,700.
** $5 compliance fee for entries between $101 and $999.
** $2 compliance fee for entries between $25 and $100.
** If you buy a Special Package (3-pack, 5-pack, 9-pack), there will be just one compliance fee. You will be eliminating those other compliance fees with a Special Package.

At this point we are not planning to charge a compliance fee for entries over $1,700.

We apologize for the added expense of playing in our high-stakes games, but we will continue to get licensed in states that require a license and we will continue to be compliant in every way. By doing that, however, it leads to either lower payout percentages or higher fees. We chose a small additional fee that covers a small percentage of this expense so that we can keep growing with new customers while keeping current customers in states like Virginia and Indiana playing.

Thanks for your understanding and let’s grow our games together. Good luck in all our games this year.

[Greg Ambrosius]

I would just like to reiterate that this is NOT something we wanted to do, but it's something we HAVE to do right now.

While biting my tongue, these fees just keep going up and up as more and more states feel the need to license DFS and of course sports betting. There is no knowledge from the legislators about the difference between DFS and season-long fantasy sports, so we keep getting lumped into every new state law. And as we top a dozen states this year where we'll be licensed, the costs just can't be totally absorbed by us.

I look forward to your feedback and you can always email me privately or post here. It's fine to have the discussion here because this affects all of us. But if we are going to be here for the long term -- and we certainly plan on being here for a long, long time as the industry leader -- then we have to be licensed and we have to pay the fees. And we will continue to grow without exempting states who allow us to keep offering these games. Thanks all.

[Thurman15]

It is fine Greg. You explained it clearly and factually and these are not your wishes, but must be done. It is not a big increase and the show must go on. Thanks for the update.

[Greg Ambrosius]

It is fine Greg. You explained it clearly and factually and these are not your wishes, but must be done. It is not a big increase and the show must go on. Thanks for the update.

Thanks very, very much Al. We are getting similar sentiments via email and through our newsletter. I think most folks realize the changing licensing environment we are faced with and the nominal fee will help us keep these contests around for as long as we can and prize payouts that make sense. Thanks again for the initial post. It means a lot to us.

[Gekko]

I hope Brad Johnson doesn’t see this

[Greg Ambrosius]

I hope Brad Johnson doesn’t see this

Welcome to Twitter!! There’s a new Brad Johnson every day on Twitter trying to knock you down!!

[bambos1]

First thing i want to thank Greg , Tom and the rest of the NFBC crew for hosting an incredible site. For many years i considered joining the NFBC community. I would look at the contest lobby and say to myself where does the rest of the money go? So i procrastinated and didn't join. Bad call Bri.
another year came and this time i said i want in with this group. Yes i am winning home leagues, crushing other site leagues but i needed to see how i will fare against the best of the best in the high stakes community. For me Fantasy was always more about the competition and shit talking than the money. i bit the bullet and I purchased my first $150.00 draft champions to get used to the site and start prepping. to me this was priceless. i convinced myself i would treat this DC as A mock draft with a $150 entry fee and the chance to cash out on the back end.I immediately was hooked to this format and purchased 3 more that year. As Draft season progressed i wanted more so i booked myself into a $1400 Auction. Yeah boy the chance to go sit down with the big boys in new York City. I need that. i went into this draft with my process and way of playing. i didn't care if i won or lost i just wanted to see how i fared. Its now Mid season we are passed the all star break. Im grinding, i am doing my thing and best of all These same guys that i look at as the best of the best were now looking up at me cruising along. top of the overall leader board , First place in 3 of my 4 draft champs. This isnt me bragging as Stephen Strausburg failed me and i didnt win that over all and settled at 3rd place. This about about the Best format and site out there, Meeting the best of the best in the industry and Talking shit with other great players I felt honored in my first year playing NFBC when Greg Sent me an email telling me how he would love to see me take down an over all punting saves. To me that intimate experience with a guy i only knew of was from his segments on Sirius xm made me feel like one of the guys. The rush of looking at that leader board every hour is by far the best experience you can encounter in the fantasy sports world. i can only hope each and everyone of you reading this gets to experience that at some point.
To this day i still compete in my AL only home league going on year 28. That is what brought me to this game but there is no more commercial site competition for me, Strictly NFBC . So as for that compliance fee NO PROBLEM guys whatever it takes to keep this going.

[Greg Ambrosius]

We appreciate the support and the nice comments Brian. We'll keep doing whatever it takes to keep this community together and keep our great games alive and well. Thanks again.

[Yah Mule]

I look forward to this rare opportunity to be in compliance with something. I'm a bad apple, I tell ya!

[Brian Jenner]

I understand why you need to do this, and being midway through draft season, implementation is necessarily clunky since you can't really adjust payouts.

However, I hope for the future it's a bit more logical. I play multiple auction leagues each year and there are never packages for those for some reason. I'll end up paying a 3.3% fee for each of my $150 Auction Championship leagues while there's only a 0.6% fee for the $150 Draft Champions bundle. Maybe a flat compliance fee per account would make more sense, and incentivize people to play more leagues. Or better yet - offer Auction bundles!

[76erfan]

I look forward to this rare opportunity to be in compliance with something. I'm a bad apple, I tell ya!

I agree with this statement:)

[Greg Ambrosius]

I understand why you need to do this, and being midway through draft season, implementation is necessarily clunky since you can't really adjust payouts.

However, I hope for the future it's a bit more logical. I play multiple auction leagues each year and there are never packages for those for some reason. I'll end up paying a 3.3% fee for each of my $150 Auction Championship leagues while there's only a 0.6% fee for the $150 Draft Champions bundle. Maybe a flat compliance fee per account would make more sense, and incentivize people to play more leagues. Or better yet - offer Auction bundles!

This is a good point and we are adding bundles right now for everything. We are creating the $50 bundles for NFBC now and $25 bundles for NFFC now. I hadn't thought of a Special Package for Online Auction leagues, but yes we can do that as well. We WANT to save you money on these contests if you plan on playing in more than one, so give us a bit here and we'll get that set up. We hear ya.

Thanks for response.

[Brian Jenner]

I understand why you need to do this, and being midway through draft season, implementation is necessarily clunky since you can't really adjust payouts.

However, I hope for the future it's a bit more logical. I play multiple auction leagues each year and there are never packages for those for some reason. I'll end up paying a 3.3% fee for each of my $150 Auction Championship leagues while there's only a 0.6% fee for the $150 Draft Champions bundle. Maybe a flat compliance fee per account would make more sense, and incentivize people to play more leagues. Or better yet - offer Auction bundles!

This is a good point and we are adding bundles right now for everything. We are creating the $50 bundles for NFBC now and $25 bundles for NFFC now. I hadn't thought of a Special Package for Online Auction leagues, but yes we can do that as well. We WANT to save you money on these contests if you plan on playing in more than one, so give us a bit here and we'll get that set up. We hear ya.

Thanks for response.

An auction package would be wonderful. I've signed up for 3 already but could add more. Thanks!