Fantasy Sports Shutdown in U.S Good News for Canada
22 May 2017 Written by: Geraldine
Ever since early 2016, the U.S governments and law enforcement authorities have been really cracking down on daily fantasy sports (DFS). The most recent updates on the situation show that quite a few states have joined others in their legal-bound banning of DFS. Major DFS sites like DraftKings and FanDuel have fought the legal situation tooth and nail, and while a lot of the court-cases are still on-going, it seems that they’ve lost the battle in some significant U.S territory.
The question is: how does this bode for the future of Canadian DFS? We’re thinking in the positive. Here’s why.
The story so far in the U.S
Since October of 2015, several states have declared DFS as ‘illegal gambling’. The legal case has always been about this seemingly small, but actually massive, problem: is DFS a skill-based game or is it, like all other sports betting, a game of chance and luck? Well, it would seem that since October 2015 onwards, a lot of states have voted in favor of the latter instead of the former. That automatically meant that DFS sites like DraftKings and FanDuel had to block players from several states from using their sites, because gambling is illegal in a lot of states in the U.S.
DraftKings and FanDuel aren’t the only DFS operators affected by this situation, but they are by the far the largest. Between the two of them, they rake in double digit millions of players every year. Although they’ve been bitter rivals in the past, their reported merger (announced earlier this year) by the end of 2017 is sure to bring lots more revenue for the kings of DFS. Only, maybe most of it won’t be from the U.S.A.
The President of the Fantasy Sports Trade Association, Paul Charchian, has estimated that the challenging and changing of current U.S legislation surrounding DFS is going to take multiple years, and who knows when it’ll actually budge. More and more states are starting to join the ranks of declaring DFS a violation of UIGEA (the Unlawful Internet Gambling Enforcement Act established in 2006). As it stands right this very second, there are already nine states where joining DraftKings or FanDuel isn’t possible. Those nine states are:
Now, it doesn’t mean that these nine states have kicked out all DFS operators from their area. It means that DraftKings and FanDuel no longer deem it profitable for their businesses to remain there, and so have blocked all players from using their sites there.
Fantasy sports in Canada
Canadian legislation has always been more loose when it comes to DFS than the U.S. And by ‘loose’, we mean ‘ambiguous’. Daily fantasy sports in Canada is still very much alive and well, with fantasy hockey (shocker!) being the most popular variety. 17% of the total population engages in DFS, with 16% being adults and 33% being teens. Even Quebec, which didn’t used to allow operators like DraftKings and FanDuel within its borders, has now joined the rest of Canada in its support of DFS.
It seems that as long as DraftKings and FanDuel don’t have any of their servers on Canadian soil, neither the Canadian government nor Canadian law enforcement agencies have any intention of pursuing legal courses of action against DFS. DFS in Canada, so far, leans more resolutely towards the ‘skill-based game’ category than it does towards ‘game of chance and luck’. Overall, it seems Canada’s legislation body seems more concerned with drugs and terrorism than with daily fantasy sports (who could blame it?).
Looking at the statistics again, what we can tell is that teens are getting more involved in DFS than the adult generations. This means that DFS is only likely to continue growing in Canada, both as the current generations grow up and start earning more, and as a trend that DFS is becoming more popular, not less.
What does this mean for the Canadian fantasy sports market?
If the U.S DFS market continues on the route it’s on now, or even if it takes longer than anticipated by DFS regulatory bodies like the Fantasy Sports Trade Association anticipated, chances are that big operators like Draftkings and FanDuel (or whatever their name is going to be by the end of 2017) will focus their energies where they know it’ll take root and grow: Canada. DFS is an integral part of sporting culture in Northern America, and all DFS operators have to do is invest their time further north.
Even if they do eventually reclaim the U.S market, until then you can be sure that all DFS sites will be especially taking care of its Canadian players. So, if you’ve ever wanted to get into fantasy sports gaming – now’s the time to do it. As a Canadian player, we feel confident saying that you’re going to be safe for a long while to come.