Banned in nearly 20 U.S. states, daily fantasy somehow thrives in Canada.
But will Ottawa decide it wants to play, too?
There are few areas in which we can avail ourselves of our vices more easily than our American neighbours. The Prohibition experience notwithstanding, it’s just a lot easier to do risky things in the States, for good ( buying alcohol) or ill (buying guns).
But there’s one way in which Canada can claim libertarian superiority over the land of the free: daily fantasy sports. As close to 20 states have either banned the rapidly growing products or moved to regulate the manner in which they are delivered, Canada, fussy old Canada, has taken no threatening action toward the industry and its two main players, DraftKings and FanDuel. We haven’t even given them the side-eye.
“Thanks,” says Jason Robins, the chief executive of DraftKings, and I accept on behalf of the nation.
Robins is speaking over the phone from New York in advance of Christmas for fantasy sports: the opening of the NFL season. It also feels like this season is a new beginning in a lot of ways for daily fantasy after the wild ride of 2015, when the industry both exploded in size and came under heavy scrutiny and not a small number of legal challenges.
Except in Canada where, as mentioned, they have been left alone. “I like to think you’re just more enlightened,” Robins says. Aw, shucks. But will we remain that way?
Daily f antasy, in case you have somehow managed to miss the industry’s blitzkrieg into the sporting landscape, allows players to make fantasy team bets in the same manner as traditional leagues, but there is no season-long requirement. Thus the “daily” part of the name. This has the advantage of allowing users to play a lot more ( yay!) and also in all likelihood lose a lot more money (boo!).
The model has been ridiculously successful. DraftKings has more than seven million registered customers globally, with the bulk of those added in the past two years, and revenue is up 98 per cent this year over the same point last year. DraftKings ( and FanDuel) have signed partnership deals with major teams and leagues, even as those leagues remain opposed to traditional wagering, and the resulting exposure has been a boon to the industry. Robins points out that Major League Baseball’s subscription app allows someone who is watching a live game to receive an alert when someone in one of their DraftKings lineups is at the plate.
They can switch to that game, watch their guy hit, then go back to whatever they were doing. That kind of integration with MLB, Robins says, “is only possible if you have them as partners.”
But the success and the massive growth — daily fantasy grew from a backwater to a multibillion-dollar industry in the time it takes your running back to commit a costly fumble — also brought problems.
Politicians who questioned its legality, others who wanted a cut, and allegations that the bulk of the prize money was going to super-users who entered a high volume of con- tests with lineups chosen by computer algorithm.
Robins says the various trouble spots were in part growing pains, the result of a business that was mostly focused on making sure it could keep its platform up and running as demand soared. It was a “painful process,” he says, but it got them to a better place. Which is not to say that everything about daily fantasy has been fully sorted.
DraftKings says that it does not offer contests in nine states that have declared the products illegal, while eight more have regulated their use.
In the most high- profile of those, New York’s state’s attorney general said they broke the law, then state legislators moved to make them legal, but regulated. The question of l egality centres on whether daily fantasy is a game of skill or of chance, as U. S. federal law prevents online gambling but allows skill- based games. This has always seemed a curious distinct i on. Winning a f antasy sports contest demands some degree of both skill and luck, as would wagering against a point spread or playing online blackjack.
Deciding that one activity is appropriately skilful while others are not seems like determining whether the sky is sufficiently blue, but this is what state legislators are doing. As are the sports leagues, which officially want no part of traditional betting, but which have embraced daily fantasy, having settled on the skill- game definition and left it at that.
A cynic would suggest that the money i nvolved was simply too much for the sports leagues to pass up and so, yes, let’s go ahead and suggest that.
In Canada, the Criminal Code is clear: gambling is illegal. Provinces are permitted to accept wagers on sporting events through an exception that allows “lottery schemes,” provided the bets aren’t on a single event, which is why they only offer parlay wagers (with terrible odds). A bill before federal parliament may yet make single-event bets legal. From this corner, hooray if it does. There are enough ways to place bets that the government might as well legalize it and take a cut. Whatever happens, we will see whether daily fantasy is ever asked to get in line.
Are our governments more enlightened? Or are they just slow to notice?