On Monday, the parent company of StarsDraft, Amaya Inc announced that they were taking the dramatic step of leaving all but four states in reaction to recent developments in the industry. StarsDraft, which is the DFS site of sister site PokerStars, will now only accept players in Kansas, Maryland, Massachusetts and New Jersey, which have greater than average legality in those states.
StarsDraft was launched only one month ago after purchasing Victiv over the summer. Amaya said in a statement that the decision to leave all but a handful of states will not have a negative impact on the business. They had previously withdrawn in other states over the last few weeks where the legal situation has been more murky.
Amaya Gaming is likely being very cautious with its approach in the United States due to PokerStars’ past difficulties with U.S. authorities. That has issue was resolved and PokerStars is now under new ownership but sensitivities still remain. PokerStars was also recently given the go ahead to relaunch in New Jersey.
Other DFS Sites Taking Measured Approach
The whole daily fantasy sports industry is monitoring developments closely, which seem to be changing on a day-to-day basis. While others have yet to bar players to the extent that StarsDraft has, there has been some other recent daily fantasy state action as DFS sites take a cautious approach to legality concerns.
Nevada – Late last week the Nevada Gaming Control Board declared that unlicensed daily fantasy sports operators would have to cease operating in the state immediately. The chairman of the NGCB said that existing DFS sites could apply for a license but it not clear whether they would be approved or if DFS sites could even apply under certain laws.
Result: Every daily fantasy sports site that we monitor has left the state of Nevada. Only one site so far, Fantasy Aces, has announced their desire to apply for a license.
Florida – After the data leak scandal broke, it was reported that a federal grand jury was convened in Florida to determine whether daily fantasy sports may be against Florida law or the Illegal Gaming Business Act.
Result: Some sites have chosen to leave Florida including Yahoo, FantasyDraft, Star Fantasy Leagues and DraftOps. The biggest DFS sites in the land, DraftKings and FanDuel, continue to operate in the state.
Michigan – Michigan was taking a look at the legality of daily fantasy sports before the data leak scandal. However, Michigan Gaming Control Board executive Rick Kalm was quoted by GamingCompliance as saying his opinion was that daily fantasy sports was “illegal under current Michigan law.” There are no indications that Michigan intends to launch a crackdown.
Result: Daily fantasy sports sites don’t seem too concerned about Michigan at this point. Only StarsDraft and Star Fantasy Leagues, which already banned 11 states (AZ, AK, DE, FL, IA, KS, LA, MT, NV, TN, WA) chose to bar players from the state.
Are More Daily Fantasy State Bans Likely?
While a review of DraftKings has found no wrongdoing on the part of a DraftKings employee who leaked insider data, that revelation isn’t likely to put the spotlight off of the daily fantasy sports industry anytime soon.
With sustained media attention over the coming weeks, there is the possibility that more states may decide that some sort of daily fantasy sports action is a priority. The Nevada decision, which happened less than a week ago, could prove to be the catalyst for other states to act. Reports that Delaware, Georgia as well as Pennsylvania and Illinois may also be coming soon. Other states scruntizing the game are a foregone conclusion.
But that many not matter. A Florida gaming attorney interviewed by Legal Sports Report says that the ongoing federal investigation could be a death sentence for the industry if it is proven even a minor law has been broken.
Meanwhile, FanDuel has started a campaign to start to get players behind the idea of contacting lawmakers about protecting their right to play. FanDuel is calling on players to “stand with us to show that millions of fans believe fantasy sports should remain legal and accessible to all who love the game.”