The NCAA Doesn’t Approve of DraftKings or FanDuel, Still Takes Their Money

Thanks to a boatload of prime-time advertising, most of the sports world is now familiar with daily fantasy sports companies like DraftKings and FanDuel. What’s still unknown — or at least up for debate — is whether or not these sites, which allow people to win real money playing fantasy contests online, offer a form of gambling or a game of skill.

The NCAA has weighed in on that debate and … gambling it is!

College athletes that put up money on sites like DraftKings and FanDuel will lose a year of eligibility, according to a tweet from Mississippi State Athletic Director Scott Stricklin on Tuesday. “Listening to [NCAA VP of Regulatory Affairs] Oliver Luck speak this morning in Dallas,” he tweeted. “He reminds that any athlete found to be gambling on college sports (includes daily fantasy such as Draft Kings) automatically loses a year of eligibility.”

https://twitter.com/stricklinMSU/status/646321879934889984

https://twitter.com/stricklinMSU/status/646322006569291776

An NCAA spokesperson confirmed the stance in a statement sent to Re/code: “NCAA members schools have defined sports wagering as putting something at risk — such as an entry fee — with the opportunity to win something in return, which includes fantasy league games. Because of this, student-athletes, coaches, administrators and national office staff may not participate in sports wagering, including fantasy league games with a paid entry fee.”

In other words: The NCAA considers daily fantasy sports like DraftKings and FanDuel to be gambling, and players found participating will be punished as a result. Top NCAA execs have also asked DraftKings and FanDuel to “discontinue fantasy games that include the names of college players,” according to ESPN, a move that would certainly cut into the businesses of both companies.

The irony in all this is that the NCAA actually benefits from fantasy sports, and not just because they help boost TV ratings. The Pac-12 Network takes money from FanDuel by airing their advertisements (though only for professional contests, not college ones). Ad money from that network is then split among the conference’s member schools. The NCAA also rakes in hundreds of millions of dollars in television deals from broadcasters like ESPN and Fox Sports that are partnering with DraftKings and show DraftKings commercials at almost every stoppage of play.

DraftKings and FanDuel aren’t the only forms of fantasy sports banned by the NCAA. Players aren’t allowed to enter paid pools (like a March Madness pool) or other, more traditional pay-to-play fantasy leagues that offer a prize payout. So this isn’t a FanDuel- and DraftKings-only issue, although those are the most hot-button companies of the moment.

The NCAA’s stance shouldn’t alter the daily fantasy business right away. But it’s still not a good sign for DraftKings and FanDuel, which have a lot to lose if regulatory bodies decide the NCAA is right.

This article originally appeared on Recode.net.