OPINION:
Cronyism is a plague on American politics, and it isn’t going anywhere anytime soon. For as long as there is a government bureaucracy as large and overreaching as ours, companies will try to game the political system for personal gain.
As recently highlighted by Stephen Moore of The Heritage Foundation, the latest example of this epidemic is in the fantasy sports industry, where DraftKings and FanDuel are trying to get a handful of states to ban the fantasy contests offered by their competitors. I’m not a big fan of sports wagering or gambling, but reading this story attracted my attention because of how egregiously salacious it is.
What’s ironic is that, once upon a time, DraftKings and FanDuel faced the same political attacks they are now waging on their competitors. They received them from competing gambling interests that did not want them in the marketplace. Fortunately, the free market prevailed, and DraftKings and FanDuel began growing and prospering after state legislatures rejected these undue attacks.
Fast forward to the present, however, and DraftKings and FanDuel are now as well connected as their old foes were then. So now, borrowing from the exact crony playbook that once threatened their future, they are the ones pulling the political strings against nascent fantasy sports companies they feel threaten their current billion-dollar market capitalizations.
Talk about hypocrisy. Needless to say, elected officials, state attorneys general and antitrust regulators must control this situation — and fast.
In my time in politics, I always tried to prevent crony deals like this one from moving forward. Just over 20 years ago, I campaigned against the tax increase for new roads that developers lobbied for, telling the state Legislature that the developers were effectively asking Virginia taxpayers to pay for their driveway. More recently, I also aggressively backed a ballot initiative to limit Virginia’s ability to use eminent domain, which generally benefits large corporations at everyday people’s expense. If I were serving today, I would, without question, do the same with respect to this fantasy sports power play.
In hopes of fending off my opposition, the fantasy lobby would likely have their political allies and affiliated advocacy groups label me an anti-business actor, but they’d be wrong. Being pro-business is not the same as being a corporatist. The former supports policies that ensure all businesses can grow and thrive; the latter enacts policies that benefit the few at the expense of the many.
No elected official or regulatory czar should ever feel the need to apologize for not carrying the water of one or two large corporations — even if said corporations have a significant economic presence in their home states.
The Federal Trade Commission filed a complaint against a proposed merger between DraftKings and FanDuel in 2017 because the commission knew that the deal would have created unfettered anti-competitive activity in the marketplace. The FTC doesn’t get much right these days, but history has proved its wisdom on DraftKings and FanDuel correct.
Now it’s time for decision-makers to double down on the FTC’s findings by filing a new complaint against this duopoly’s current crony dealings. The health of the marketplace might depend on it.
• Ken Cuccinelli served as the 46th attorney general of Virginia from 2010 to 2014. He also served as a member of the Virginia Senate from the 37th District from 2002 to 2010.
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