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Ontario’s Attorney General, Doug Downey, has indicated that the government is actively studying “liquidity” issues affecting the daily fantasy sports (DFS) business. This follows the province’s opening of a competitive market for sports betting and online casino gaming, which has had substantial ramifications for DFS companies. Downey acknowledged the liquidity issues during his speech at the Canadian Gaming Summit in Toronto, hinting at continued efforts to remedy the matter.
Following the implementation of the new legal framework for Ontario sports betting in April 2022, the province’s DFS business took a significant hit. DraftKings and FanDuel, for example, elected to discontinue their DFS operations in Ontario, instead focusing on event wagering and internet-based casino games. As a result, citizens were deprived of their traditional entertainment and gambling opportunities. Similarly, the province’s online poker scene has been stunted for similar reasons.
The issues that the DFS sector faces in Ontario are inextricably linked to the province’s online gambling legislation. The designation of “pay-to-play” DFS as gambling rather than a “game of skill,” as recognized in several US states, has required operators to register with Ontario authorities, pay licensing fees, and donate a portion of their revenue to the province. Furthermore, Ontario regulations require that all participants on an iGaming site be from Ontario, restricting the potential player pool for online fantasy sports and poker and adding to the migration of DFS operators.
The Fantasy Sports and Gaming Association recently admitted a fall in fantasy sports participation in Canada, blaming it to the legalization of sports wagering and Ontario’s enactment of unsustainable restrictions for paid fantasy sports. This emphasizes the importance of addressing regulatory constraints and striking a balance that fosters the growth of the DFS business while guaranteeing consumer protection and regulatory compliance.
In light of the impact on DFS choices, online poker, and horse racing betting in Ontario, regulators have signaled a willingness to evaluate existing legislation and make necessary changes. The Ontario Alcohol and Gaming Commission (AGCO) has suggested a restriction on the use of athletes and select celebrities in iGaming advertising, with a decision due in the coming weeks. AGCO CEO Tom Mungham emphasized the company’s continual examination of market risks and willingness to alter legislation as needed to create a sustainable and responsible iGaming environment.