When Tim Dent first joined DraftKings in 2013, the now-well known fantasy sports and sports betting company was in its infancy.
As a result, the experienced accountant wore many hats in addition to his chief financial officer duties. Though he is not an attorney, Dent’s roles included overseeing legal and compliance, as well as HR and customer support.
As the company and its team grew, Dent was able to hand off many of these responsibilities, including by hiring a general counsel.
But the nonlawyer hung on to the chief compliance officer role for his entire nearly nine-year tenure, and Dent said he was able to effectively build out DraftKings’ compliance function amid a dynamic regulatory environment.
“I knew the organization, I knew the product, I knew the general risk areas and I knew where to direct my team in order to cover off those risk areas,” he told Legal Dive.
Working with regulators
A key component of DraftKings’ compliance efforts was interacting with gaming regulators in different states, which took on greater importance amid increased government scrutiny of sports betting.
Dent said the company worked to educate regulators about the distinctions between daily fantasy sports contests and sports betting, as the government officials were much more familiar with land-based casinos than online, mobile-first operators.
These educational efforts also included demonstrating to regulators the front- and back-ends of DraftKings’ platform and the controls the company had in place.
Additionally, the company would offer feedback about proposed new gaming regulations put forward by government agencies.
“We would spend a lot of time going out there and meeting with them, going through the regulations, providing them our comments and suggestions, and then working closely with them to get approval and to go live,” Dent said.
“There’s a lot of work to go live in a state, but then there's a lot of work just to maintain your license within the state,” he added.
Even with its efforts to engage regulators, DraftKings has through the years faced litigation from government agencies and consumers alleging violation of gaming laws, including in New York.
However, a 2018 U.S. Supreme Court ruling paved the way for companies like DraftKings to expand their operations because it overturned a law that effectively banned commercial sports betting in most states.
And earlier this year, New York’s highest court ruled that fantasy sports contests like those operated by DraftKings and FanDuel were constitutional.
Using a CLM platform
Implementing the LinkSquares contract lifecycle management (CLM) system was another step that aided DraftKings' in its compliance work, according to Dent.
He said the platform was very helpful during risk assessments because it allowed the compliance team to easily pull up the company’s contracts and identify non-standard provisions.
The compliance function would then work with the legal department to determine the risk implications of those provisions, a task that was essential particularly amid crisis management situations.
“We could roll it up and say, ‘Okay, do we have a risk issue here that we need to manage, or is it properly under control?” Dent said. “The LinkSquares software gave us visibility into all of that.”
The company’s CFO also appreciated the CLM system, Dent said, because it enabled the finance team to keep track of DraftKings’ financial obligations embedded in contracts.
New board role
Dent retired from DraftKings in July 2021, having seen the company grow from 10 employees to roughly 3,500. But he still has a passion for compliance-related work.
So when an opportunity came up this year to join LinkSquares’ board of directors, he jumped at it.
Not only does he know the product well, but he already has a great relationship with LinksSquares’ Chief Legal Officer Tim Parilla from Parilla’s time as DraftKings’ GC.
As part of his board role, Dent will lead LinkSquares’ Audit Committee and support its financial management and compliance efforts.
He joins the company at a time in which it is growing. The startup achieved $20 million in recurring revenue and expects to grow that figure by 150% this year, according to a recent press release.
LinkSquares was also named to Forbes' Next Billion-Dollar Startups list for 2022, an honor that came just a few months the company announced it raised $100 million in Series C financing led by G Squared.
Dent said his experience helping DraftKings grow will aid his work at LinkSquares.
“I think LinkSquares has a positive and bright future in front of it, and I'm just happy to be a part of it,” he said.