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

Written By

Updated on

Ontario sports betting

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

FanDuel will 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 sportsbook for ON sports betting next week.

Following FanDuel’s decision, the Fantasy 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 don’t think it was intentional, but our industry was caught off guard. We’re 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.

Ontario sports betting regulations prohibitive for DFS?

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.”

Ontario player pool limitations

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.

DFS operators staying elsewhere in Canada

Hennessy said FanDuel’s 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.