Could Daily Fantasy Sports Legal Problems Head North Of The Border To Quebec?

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Quebec online gambling blacklist DFS ramifications

The daily fantasy sports industry has been the focus of legal battles and statehouses in the US for the first half of 2016.

But there has been little chatter in Canada, the other major country that many DFS operators serve.

That could possibly be poised to change, at least in Quebec.

What’s going on in Quebec?

Loto-Quebec — which runs online gambling on behalf of the province — is creating a blacklist of operators, according to the Journal de Quebec.

That’s per a new law on the books that says, in part, that “The Société des loteries du Québec shall oversee the accessibility of online gambling. It shall draw up a list of unauthorized online gambling sites and provide the list to the Régie des alcools …”

This is aimed largely at online gambling and poker companies — Quebec-based Amaya (the owner of PokerStars) is almost certain to end up on this list.

Will DFS be included?

There appears to be at least a chance the daily fantasy sports industry gets swept up in this effort, as well. Legal Sports Report has no insight as to whether DFS sites will be included in the blacklist.

The question likely boils down to two simple questions: Does Loto-Quebec have designs on the DFS market, or does it view it as a threat to gaming revenue?

If the answer is “yes” to either of those questions, then expect DFS sites to end up on the list.

The Financial Post, in a story late last year, is one of the few outlets to even briefly take a look at the issue of DFS legality in Quebec.

Who is in Quebec, and who isn’t?

Like many jurisdictions where the law regarding DFS isn’t altogether clear, DFS sites are not unanimous in their service of the Quebec market.

Quebec is not listed as a province that is prohibited in the terms of use of either DraftKings or FanDuel.

On the other site of the ledger, Toronto-based Fantasy Feud and the legally conservative Star Fantasy Leagues are among the sites that do not accept real-money entries from Quebec users.

Quebec has long been a “gray market” in terms of online gambling, although DFS operators insist that their contests are games of skill in the jurisdictions they serve.

What’s the impact for DFS?

If daily fantasy sports operators do end up on the blacklist, it could go several ways:

Of those scenarios, a legal challenge of the law seems exceedingly likely in Quebec by some interested party.

On the final point, it seems somewhat unlikely that DraftKings or FanDuel would partner with Loto-Quebec. There is a chance that smaller operators eyeing expansion via regulated markets would seek a partnership with L-Q.

The Quebec market for DFS

There are more than 8 million people in Quebec, although Legal Sports Report has no statistics on the number of DFS users from the province. But the base population means the market is not an inconsequential one in terms of DFS players.

FanDuel and DraftKings have had to pull out of a number of US states in the past year. Losing yet another source of liquidity would not be the first choice of either site or any of their smaller competitors.

But such a decision could be months or even years away. Yet given the velocity at which legal concerns surfaced in the US, it’s a situation worth monitoring.