StarsDraft To Stop Offering Real-Money Daily Fantasy Sports In All But Four U.S. States

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StarsDraft plans to stop offering daily fantasy sports in all but four states, the most aggressive reaction to date by a DFS operator to increasing scrutiny of the product from lawmakers and regulators.

That’s per a statement released Monday morning by the company.

StarsDraft intends to focus operations in states with favorable existing daily fantasy sports guidance, including New Jersey, Massachusetts, Kansas and Maryland.”

Full text of the statement below.

The four states will share a common player pool.

Why these four states?

The states all have greater-than-average legal clarity on the question of daily fantasy sports:

Nevada shares that level of clarity, but requires a license to operate DFS sites – a license StarsDraft does not currently hold.

Latest in jumble of DFS operators approaches to permitted states

The sweeping decision by StarsDraft represents another entry in the complex and increasingly contradictory approaches of various daily fantasy operators toward individual states.

Our table sampling the varying policies of major DFS operators toward questioned states captures the point.

Florida offers an interesting microcosm of the larger question. Legal experts have voiced concerns about the legality of DFS in Florida, and federal officials appear to have empaneled a grand jury in Florida to consider the issue.

Many DFS operators — including Yahoo, Fantasy Draft, Star Fantasy Leagues, Draft, and Draft Ops — exited the market following reports of the grand jury. But many others — including market leaders DraftKings and FanDuel — remained active in Florida as of this article.

StarsDraft occupies unique position

Unlike most other major DFS operators, StarsDraft is part of a multi-billion dollar gambling company. That company — Amaya — also owns and operates PokerStars.

The fact alone means that StarsDraft has a fundamentally different risk/reward calculus than operators like FanDuel or DraftKings.

The controversial history surrounding PokerStars’ operation in the U.S. prior to Amaya’s acquisition adds another wrinkle to StarsDraft’s decision-making process.

To wit: Amaya recently agreed to significant concessions requested by regulators in New Jersey in order to secure the ability of PokerStars NJ to operate in the state’s regulated online poker market.

The company is also understood to be seeking a path to Nevada’s regulated online poker market and is currently in a contentious debate in California regarding PokerStars’ ability to participate should that state regulate online poker.

Full text of statement from StarsDraft

MONTREAL, Canada – Oct. 19, 2015 – Amaya Inc. (Nasdaq: AYA, TSX: AYA) (“Amaya”) has announced that it is limiting its daily fantasy sports (“DFS”) brand StarsDraft from operating real money games and tournaments in most U.S. states following a review of recent developments in a number of jurisdictions.  The decision is not anticipated to have a negative financial impact on Amaya.  StarsDraft players in all jurisdictions will continue to have access to the funds in their online accounts, which are available for withdrawal at any time.

We have previously called for state regulation and licensing of DFS to ensure consumer protection and strict government oversight of operators.  Prior to the launch of StarsDraft and based on a thorough review of the regulatory environment at the time, Amaya decided not to launch StarsDraft in jurisdictions where many of our competitors continue to operate today, including Michigan.  We recently withdrew from Florida and Nevada, where last week the respected Nevada Gaming Control Board (NGCB) determined that DFS operators in that State are required to obtain a gaming license from the NGCB.  Amaya supports the decision by the NGCB, and believes that it is prudent to limit the StarsDraft offering until such time as more states adopt a clear stance on daily fantasy sports.

We will actively monitor developments and work with all states interested in implementing clear guidelines for the operation of daily fantasy sports in their jurisdiction.  In the meantime, StarsDraft intends to focus operations in states with favorable existing daily fantasy sports guidance, including New Jersey, Massachusetts, Kansas and Maryland.  

Amaya entered the daily fantasy sports industry a little over a month ago when it acquired Victiv and re-launched it as StarsDraft, bringing its global experience in gaming regulation and best practices with respect to compliance, security, responsible gaming and player fund protection. Amaya is currently the most licensed online gaming operator in the world.

Email sent to impacted players

Following a review of recent daily fantasy sports developments within a number of jurisdictions, we regret to inform you that StarsDraft is now limiting its operations to a select list of states. Starting today, only players physically located in Kansas, Massachusetts, Maryland and New Jersey will be able to participate in our fantasy sports contests.

Withdrawing Your Funds

As part of Amaya Inc., one of the world’s largest and most regulated online gaming brands, we at StarsDraft pride ourselves on best practices with respect to compliance, security, responsible gaming and the protection of player funds. Unlike many other fantasy sports operators, Amaya ensures that all of its brands hold end users’ deposits, winnings and bonuses in trust accounts through which money is fully protected from company operating liabilities.

As such, your full balance is and will remain available for withdrawal at your earliest convenience.

To thank you for your support of the StarsDraft brand, we are making the following changes to our system to help assist players with their withdrawal requests:

1. We have removed any minimum withdraw restrictions;
2. We have removed any Bankroll Builder promotional withdraw restrictions;
3. We are converting all loyalty points into cash;
4. We are converting all open tickets and non-deposit promotion tickets into cash (this does not include Bankroll Builder or First Down deposit tickets);
5. We have removed the minimum check withdrawal restrictions.

Any winnings and subsequent tickets or loyalty points earned after tonight’s NFL payouts will also be converted to cash following the above structure.

For more information on this change, please click here.

A Regulated Daily Fantasy Sports Environment

The recent incidents involving the practices of certain leading companies in DFS demonstrate that the current self-regulatory practices have fallen short.

We strongly believe that there is a real need for state regulation and licensing of DFS, and until such time, we will not be operating in any other states than the four mentioned above which already have existing and clearly defined daily fantasy sports guidance. We believe that this is the responsible approach for our company and encourage others in the industry to consider the same measures in order to ensure the future growth and viability of daily fantasy sports in the U.S.

We apologize for the abrupt change in policy, we will actively monitor ongoing developments within DFS and we look forward to working with all states interested in implementing set guidelines for the operation of daily fantasy sports in their jurisdiction.