Gambling expert calls on provinces to step into daily fantasy sports arena

A gambling researcher is calling on Canada’s provincial lottery corporations to enter the controversial business of daily fantasy sports, citing their ability to best regulate the activity that has been characterized as illegal gambling by some U.S. states.

BCLC says it recognizes the growing popularity of daily fantasy, but isn't adding it just yet

Daily fantasy sports rivals DraftKings and FanDuel have agreed to merge after months of speculation and increasing regulatory scrutiny. (The Associated Press/Stephan Savoia)

A gambling researcher is calling on Canada's provincial lottery corporations to enter the controversial business of daily fantasy sports, citing their ability to best regulate the activity that has been characterized as illegal gambling by some U.S. states. 

Daily fantasy sports differs from the more familiar season-long game where fans act as managers for a roster of selected real-life players over the course of a season. 

In DFS, fans select a roster of players who are competing on the same day. Those selections are then entered into contests against other fans' fantasy rosters with the players' real in-game stats determining the winners.

In this March 18, 2016 file photo, daily fantasy sports player Scott Burlingame poses with the Syde site on his smartphone at his home in Aldie, Va. (The Associated Press/Harry Hamburg)

While some competitions are free to enter, DFS becomes controversial due to the entry fees providers collect and the payouts they provide to winners. 

"When you're putting money down to win money and there's a probability that you're not going to win money, then that's gambling," said Prof. Jeffrey Derevensky of McGill University. 

Derevensky is encouraging provincial governments to consider adopting DFS into their stables of online games, saying they're best equipped to label the activity as gambling, and lend their expertise enforcing identity and age verification, self-exclusion programs and voluntary daily limits.

"Any form of fantasy should have those same kind of responsible gambling features built into their site," said Derevensky.

Legal grey zone

He is one of many experts who assert that DFS is a form of gambling, but legal opinions aren't as clear and vary widely between jurisdictions.

In Canada, the federal government has shown little interest in exploring the legality of DFS. And, even if it considered daily fantasy to be gambling, Ottawa has historically only prosecuted sites with servers in Canada, which most DFS providers do not have. 

But in the U.S., industry leaders DraftKings and FanDuel have faced a more hostile legal environment and spent much of 2015 and 2016 fighting legal battles for their survival, as a number of states moved to shut them down as a form of illegal gambling. 

This despite DFS branding being increasingly hard to miss with providers securing sponsorship deals with pro teams across all major sports and even entire leagues.

Logos of daily fantasy sports companies like FanDuel are easily found at many sporting events, including this NCAA college basketball game in New York state. (The Associated Press/Kathy Willens, File)

Currently, DFS is restricted in 10 states while seven more have partial restrictions.

Provincial opportunity

Some states, including New York, Massachusetts and Virginia, have regulated DFS and require providers to pay registration fees and implement age-verification policies.

While the game may be labelled as fantasy, there is serious money at stake with an estimated 57.4 million fantasy players in North America, according to the Fantasy Sports Trade Association.

Those who play daily fantasy sports compile a roster of real-life players with pre-assigned values. (Yahoo Sports)

Derevensky says DFS represents an opportunity for Canada's provincial lottery operators to add a new and growing product.

He's scheduled to speak in Vancouver on Tuesday at the New Horizons in Responsible Gaming Conference, an event hosted by the British Columbia Lottery Corporation where experts share new research.

BCLC says its aware of DFS' popularity, adding that it's seen double-digit growth in the amount wagered on sports compared to last year. But, spokeswoman Angela Koulyras says there are no immediate plans for BCLC to offer DFS on its site just yet.

"We recognize that DFS is growing in popularity and interest and we're just keeping a close eye on it at this time."

Those already in the business say they're not afraid of newcomers and stand by their product.

"We have competition everywhere. That's what drives us," said James Chisholm, DraftKings's director of public affairs.

"No one has a greater incentive to ensure people who are playing our game are who they say they are than we do."

About the Author

Matthew Black

@TheMatthewBlack

Matthew Black is a B.C.-based writer, producer and reporter. He writes mostly about sports and has worked for CBC in Toronto and Vancouver as well as abroad in London.

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