Will Canada Close Daily Fantastic Sports Venues? Don’t bet on it

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The daily fantasy sports industry is fighting for its survival in the United States – pushing back against accusations that it is an illegal form of gambling.

But in Canada, it seems like business is going on business as usual for those who enjoy betting on these fantastic lineups of professional athletes, as the government and law enforcement agencies have shown little interest in. crack down.

Casual sports fans are probably familiar with everyday fantasy sports thanks to the aggressive marketing of websites like FanDuel and DraftKings.

The two US-based sites dominate the industry and tirelessly promote their product through TV commercials, rink ads, and, for a brief period, sponsored segments on at least one multi-sport network.

DFS allows fans to act as managers by selecting their own roster of professional players in a range of sports – from NFL football and NHL hockey to mixed martial arts and professional football – who will compete on the same day.

These fantastic rosters are then paired up in a head-to-head competition against other “managers”, with players’ actual in-game stats from that day onward determining the fantasy’s daily winners.

The next day, managers can start over with a new roster and a new roster of other managers to compete against.

What makes DFS controversial are the entry fees these sites collect and the cash prizes they pay out to winners, which can range from pocket change to tens of thousands of dollars.

DraftKings boasts of pouring over $ 1 billion in cash and prizes last year alone.

Its rival, FanDuel, claims to have over a million active players worldwide and is backed by more than US $ 360 million in funding from investors.

The company can’t say how many of those users are Canadians, but a representative said that “not surprisingly, Canadians are much more likely to play fantasy hockey every day.”

Sports betting

There is no doubt that these sites are popular, but now a growing number of voices from the legal and gaming industry argue that DFS is essentially sports betting – with the bet placed on the individual performance of players rather than the result of a game.

“We believe this is a gambling product because of the way the Criminal Code defines a gambling product in Canada,” said Paul Burns of the Canadian Gaming Association.

An employee of the Boston office of DraftKings, a daily fantasy sports company, walks past screens displaying statistics from the company’s online system. The largely unregulated multibillion dollar industry faces lawsuits on a variety of fronts. (Stephan Savoia / Associated press)

Indeed, section 197 of the Criminal Code defines a “game” as being “chance or a mixture of chance and skill”.

And jurists have argued that because this definition does not refer to games of pure jurisdiction, this implies that they are not subject to the gambling provisions of the code.

This is also why daily fantasy sports sites have long insisted that their product is pure game of skill.

But those who work in Canada’s $ 16 billion-a-year gaming industry disagree, saying player performance is only predictable up to a point.

“While there may be skill in building your roster, there is always a great deal of luck,” says Burns. “Someone might break a leg, the current might drop, someone’s girlfriend might throw them 10 minutes before the denunciation.”

American repression

In the United States, the distinction between competence versus mixed competence and luck is at the heart of a series of legal battles the DFS industry is waging for its survival.

Last October, Nevada became the first state to restrict the DFS, ordering sites to shut down until they obtained state gaming licenses.

Soon after, New York Attorney General Eric Schneiderman began investigating allegations that industry employees were using inside information to win daily contests.

The survey also alleged that industry ads tempting players with six-figure payouts were misleading and that only 1% of players won most of the prizes.

“Everyday fantasy sports are neither victimless nor harmless, and it’s clear that DraftKings and FanDuel are the leaders of a vast, multi-billion dollar program designed to evade the law and slaughter sports fans across the country. country, “Schneiderman wrote in a November statement. .

Attorneys General for Illinois, Texas and, more recently, Hawaii have also ruled that daily fantasy sports are illegal under their state laws. Other states, including Washington, Florida, and Massachusetts, have considered action to regulate or ban DFS.

Application priorities

In Canada, meanwhile, lawsuits were not pursued despite the similar legal background.

“Authorities are focusing more on fighting terrorism, drugs, motorcycle gangs and the like, and they should be,” said Michael Lipton, lawyer and gaming law expert at Dickinson Wright law firm. in Toronto.

“We have always had a fairly liberal attitude on matters of this nature.”

Historically, authorities here have only shown interest in attacking companies with servers in Canada, which FanDuel and DraftKings do not.

He says provincial attorneys general, as well as provincial lottery corporations and local law enforcement agencies, need to prioritize their workload, and DFS has yet to justify further action.

“Do we have the resources? Are the public hurt? Is there a problem the public needs to be protected from? Lipton asked.

Last year, the CGA sought legal advice from a former general counsel for the Alcohol and Gaming Commission of Ontario. The CGA said the report argued that DFS was illegal gambling and should be regulated in Canada.

Burns said the report was shared with law enforcement, but he is not sure if this will influence authorities to take action.

“We put it there. Whether or not someone chooses to do anything is not up to us.”

While the advisory was intended to capture the attention of industry and lawmakers, even Burns is keeping his expectations for change in check. “Frankly, no one is going to bet their career on this stuff.”


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