[toc]Registering and loading a real-money Yahoo Sports Daily Fantasy account — and most other DFS accounts for that matter — is a quick process that more closely resembles the signup process at offshore online gambling sites than state-regulated sites in markets like New Jersey.
Comparing the signup and depositing process at Yahoo and the typical regulated NJ online poker site reveals a number of points of departure that are cause for concern for players and the DFS industry at large.
Yahoo DFS signup requires minimal information, lacks obvious checks
For those who already possess a Yahoo account, registering for the site’s daily fantasy platform is as simple as signing in.
Everyone else will first have to create an account, which entails providing the following basic information:
- First and last name
- Mobile phone number
- Date of birth
- Recovery number (optional)
There are no immediately apparent identification checks associated with account creation, although Yahoo’s DFS app does employ geolocation checks when depositing.
By contrast, signing up for a New Jersey regulated online gaming account is a significantly more involved process, necessitating players to fork over sensitive information.
In addition to the information required by Yahoo’s DFS platform, New Jersey online gambling sites require that prospective account holders provide the following:
- Valid physical address
- Valid email address
- Answers to security questions
- Proof of identity, typically either the last four digits of a user’s Social Security number, a full Social Security number or information akin to what a financial institution may ask when opening an account
New Jersey operators are required by law to verify the identity of their consumers prior to them making a real-money deposit – hence the need for a Social Security number or equivalent.
What results is a more intrusive and arduous registration process, but one that results in greatly enhanced consumer and operator protection.
Yahoo’s approach is simply “irresponsible,” an industry source with operations experience told LSR.
“What’s concerning for me,” the source, who wished to remain anonymous, continued, “is that there are thousands of minors playing free fantasy sports at Yahoo right now. If you look at the FSTA data, almost 10 million of the estimated 51.6 million fantasy sports players are under 18. Without sufficient age or identity verification in place, it seems all too likely that some of those players will be able to slip into real-money DFS contests at Yahoo.”
Deposit / cashouts on Yahoo appear vulnerable to fraud
Deposits on Yahoo DFS can be processed via one of two means:
- Linked PayPal account
- Visa/MasterCard/American Express/Discover credit cards
As far as withdrawals, Yahoo only authorizes payouts to linked PayPal accounts.
New Jersey sites generally require patrons to provide further proof of their identity, either via a financial banking statement or photo id, before approving a withdrawal.
Yahoo appears to have no similar checks in place, based on my experience and anecdotal reports.
The upshot is troubling: Yahoo DFS does not appear to have clear visibility into who is actually depositing and cashing out at their site.
I was quite easily able to deposit funds on to a bogus Yahoo account using a legitimate credit card and PayPal account.
More alarming: withdrawals were also processed without issue, at least on the operator end, despite the information on the Yahoo account not matching the PayPal account.
You are not, to the best of my knowledge, able to use a financial account bearing someone else’s name, to deposit or cash out at any regulated New Jersey online gambling sites.
Pair that vulnerability with anecdotal reports of players being able to deposit and subsequently cashout after no play within minutes of depositing and you have a situation that, from the outside, appears to fail to satisfy the basic thresholds for effective anti-money laundering controls.
Yahoo, when asked about its deposit and withdrawal processes, offered the following via a spokesperson:
Yahoo Sports Daily Fantasy conforms with the industry standards around providing financial safeguards for our users. We are constantly evaluating what makes the most sense for our users.
Yahoo not representative of all daily fantasy sports sites
It’s fairly safe to say that identity verification and cashiering protocols vary widely from DFS site to DFS site.
Star Fantasy Leagues has a vigorous registration process that requires players to provide the last four digits of their SSN and a full mailing address, more closely resembling the New Jersey sign-up process.
On DraftKings, all payment information must not only match the user’s information, but be found in a database. And anyone who wants to withdraw funds must submit a photo ID.
The greater point here is that there is no set of universal standards governing the daily fantasy sports industry, leaving it up to individual operators to set their own guidelines. That could lead to a slew of potential complications down the road.
“It’s a shame,” the same industry source told LSR, “that as the DFS industry is fighting against overarching regulation, a highly visible company like Yahoo decides to launch with what appear to be substandard controls on the ability of minors to access games.”
To date, there have been no horror stories of major DFS sites refusing (or being unable) to honor payout requests.
But, thanks to tight, consistent regulation, such issues simply do not exist in New Jersey’s licensed online poker and casino market.
For DFS sites to ensure a similar level of integrity and trust, the nascent industry may have to traverse a similar path.