With Ontario Sports Betting Near, DFS Operators To Bail Over Regulation – Legal Sports Report

As Ontarioreadies for commercial sports betting, the province will likely lose most of its daily fantasy sports operators.

FanDuelwill pull its daily fantasy sports product out of Ontario on Friday because of regulatory issues, company spokesperson Kevin Hennessy confirmed Tuesday.That comes as FanDuel prepares to launch its sportsbookfor ON sports betting next week.

Following FanDuels decision, theFantasy Sports & Gaming Association issued a press release. Most DFS operators active in Ontario will join FanDuel in leaving the province, said Peter Schoenke, an FSGA board member.

When Ontario put forth their regulations, they were just not hospitable to daily fantasy sports, Schoenke told LSR. I dont think it was intentional, but our industry was caught off guard. Were hopeful [the Alcohol and Gaming Commission of Ontario] and elected officials hear from consumers and realize the need to address this issue.

DraftKings did not respond to a request for comment as of Tuesday afternoon.

The AGCO regulations require a CAD $100,000 registration fee and a 25% tax on DFS revenue. Both of those figures are nearly double the rates of any US state, according to FSGA.

Paid fantasy sports contests operate differently than sports betting, iGaming or brick and mortar casinos, with low margins and player pools from multiple jurisdictions, the FSGA statement said. Large registration fees are especially prohibitive for smaller operators and reduce competition as witnessed in US states such as Indiana and Delaware.

Fantasy contests are explicitly included in the regulated online gaming market in Ontario. That causes a problem for DFS products.

Unfortunately, games offered in the regulated market currently cannot include shared liquidity with other jurisdictions meaning Ontario players would only be able to play against other Ontario players, Hennessy said. Contests would need to be smaller, with significantly smaller prizing. FanDuel knows such a product would not be attractive to our Ontario players.

There are nearly 2 million DFS players in Ontario, according to FSGA. Hennessy said DFS accounts and wallets will still be available to customers in Ontario.

Hennessy said FanDuels DFS product will remain live in other Canadian provinces. Schoenke said he believes other operators will also stay active in other provinces.

Ontario is the first province to open up its sports betting market to private companies, while others offer single-event wagering through provincial lotteries.Schoenke said DFS regulations in other provinces are virtually nonexistent, and he hopes for more clarity in the future.

Beyond Ontario, Schoenke has yet to hear of any problems in other provinces. Still, he said there are multiple issues to work through with Ontario regulators.

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With Ontario Sports Betting Near, DFS Operators To Bail Over Regulation - Legal Sports Report