What’s Next in the Bryce Harper-FanDuel Case?

Pennsylvania gambling regulators are “reviewing” a controversial video involving MLB star Bryce Harper and sports betting giant FanDuel. The incident could have regulatory and policy impacts in the Keystone State and beyond.

FanDuel allegedly sent the personalized video featuring Harper, which came to light last week as part of a civil lawsuit against FanDuel, to a man who was later diagnosed with a gambling addiction. He allegedly lost $1.5 million on the platform, mostly on NFL bets.

Harper finally responded days later, on Monday, in an Instagram post, claiming that he didn’t know how the video would be used. Harper said that FanDuel requested his involvement using the platform Cameo, which lets users pay for personalized messages from celebrities.

As of writing, this is still a developing story (a scandal in many regards). I have some stray thoughts on the situation:

1. The Pennsylvania Gaming Control Board likely feels pressure to complete its “review” and move quickly. Gambling regulation in Pennsylvania and elsewhere often moves at a snail’s pace when it comes to holding gambling companies accountable for misconduct. We typically see monetary penalties issued 1-2 years after a violation took place. I expect the under on the typical timeframe here, as the Harper video received so much attention and makes the industry look predatory. However…

2. There is pending litigation against FanDuel involving the sports bettor who received the video. I’m not sure whether the PGCB would issue a ruling on the video while a lawsuit against FanDuel is pending. An adverse ruling against FanDuel could affect the civil case. Maybe the PGCB does not care, since taking this into account could undermine public perception of its independence. FanDuel may want to settle this case with the plaintiffs quickly and potentially expedite the regulatory process involving potential violations.

3. Pennsylvania regulators may look at whether the video was an advertisement, which should have included an addiction hotline number, or an unauthorized promotion if the personalized video is deemed something of value for the bettor. FanDuel allegedly used an influencer platform called Cameo to acquire the video from Harper. Generally, operators must communicate with regulators about promotions. The PGCB could find a violation here and fine FanDuel in the ballpark of $50,000 to $100,000. For what it’s worth, the record gambling-related penalty in state history is $1 million, but that was for much more serious violations. Regardless, any fine from Pennsylvania likely wouldn’t have a significant direct financial impact on the online gambling giant.

4. For FanDuel, a relatively small monetary penalty may be welcome. As is usually the case with these regulatory settlements, the operator gets to admit no systemic wrongdoing (e.g., a “rogue employee,” as reportedly may already be the developing defense) and pledge to do better and change some internal policies or procedures. The business model, which critics say is fundamentally harmful, would remain unaltered.

5. This kind of personalized message to an online sports betting high roller hasn’t been uncovered before. It’s the first that we know of. If other sportsbooks are doing this and so far getting away with it, that could affect what the PGCB does. It may take action against FanDuel and issue a public statement warning the rest of the industry, similar to what New Jersey did some years ago, when the industry delayed customer withdrawal requests.

6. If personalized athlete messages have happened with any regularity, Pennsylvania lawmakers may want to act to address the declining reputation of its legal sports betting industry. Banning direct marketing, which the Harper video may be a form of, is part of the comprehensive reform some advocates have called for. More likely, lawmakers would consider a narrower restriction if they decide to act at all. The betting lobby spends millions to stymie reform.

7. As for Harper, it’s hard to believe the MLB star could be that unaware of the purpose of the message. He posted a statement on his Instagram account saying he didn’t know the video would be used for “VIP promotion” and that he has no relationship with FanDuel. He indicated at the end of the post that his attorneys advised him not to say more. As of writing, he’s not a defendant in the civil case, but that could change. It’s important to note that Harper mentioned FanDuel by name in the video, showing he knew it was for a sportsbook. He says he didn’t know the video “would be used for commercial purposes.” Maybe he thought FanDuel was a nonprofit?

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