Experts warn Canada DFS Sports Accounts aren’t Safe without Regulation

As legal controversy surrounding daily fantasy sports gets heated in the United States, a number of conversant groups are warning Canadians with DFS sports accounts that their money may not be safe. In the last month alone, some lawyers, doctors and trade groups have all agreed that, without regulation, bettors could find their accounts in jeopardy if daily fantasy sports is eventually deemed illegal in the US or Canada.

Paul Burns is the Vice President of the Canadian Gaming Association, an organization that promotes regulation among the country’s gambling industry. According to a report in the National Post, Burns believes the current scrutiny of DFS sports betting in the US could cause problems for Canadians if regulations are not set forth; the sooner the better.

“The scandal in the U.S. has only heightened the need for changes to the Criminal Code and for clarifying of the law,” said Burns.

The CGA estimates between $4-$5 billion is funneled overseas by Canadian online sports bettor, while only $500 million is being wagered on legal sports betting opportunities within the country. That figure includes all forms of sports betting, not just DFS.

“Provincial lottery corporations are hugely frustrated,” said Burns. “They’ve watched the rise of daily fantasy sports over the past two years. Other folks have access to the market with no repercussions.”

The Potential Threat for DFS Players

The CGA believes such repercussions could arise, and at a moment’s notice, if the US decides to officially criminalize DFS. Because the operators are not regulated, there is no government for players to turn towards to recover their finances.

Hypothetically speaking, if DraftKings were to suddenly shut down, no governing body would be there to say “you must pay your players their account balance”. Or, the government could take steps to shut down DraftKings and seize all funds, but returning the money to the players isn’t required, and even if it was attempted, we’ve all seen how sluggish that process can be, al a Black Friday 2011. (Some American Full Tilt Poker players are still awaiting reimbursement to this day.)

How do DFS Sports Work?

DFS sites give customers the option to pay an entry fee, then draft a series of professional athletes to their fantasy team, limited to a universal salary cap. As the real-world contests take place, DFS teams compete against one another. The athletes who perform the best receive the most points, and the bettors whose athletes receive the most cumulative points win the DFS game, and a proportionate amount of the cash prize pool.

The entry fee could range anywhere from $0.25 to up to $1,000+. Unlike traditional fantasy sports, though, the games take place within minimal time frames, lasting a few hours, days or, at most, a week.

According to the Fantasy Sports Trade Association, there are approximately 57 million people across the US and Canada who took part in DFS sports this year alone; up from 41.5 million in 2014.

While some US states are debating whether DFS should remain legal (Nevada and New York recently said “no” to that query), by Canadian law, some say there shouldn’t even be a question. Gambling products are only considered legal when provided by the lottery corporation of a respective province. For players, making a wager on any gambling activity (that is, an activity that involves an element of chance) is illegal if it is not distributed by said lottery corporation.

Yet there is a question looming that must be answered first and foremost:

Is daily fantasy sports a form of gambling?

 
DFS sports operators insist that it’s not. They say that, by giving members the ability to research the teams and their players, strategizing their picks and stay within a salary cap, the games deliver an overriding element of skill. Thus daily fantasy sports cannot be considering a game of chance.

On the other side of the fence, it’s been said that DFS sports are teeming with elements of randomness that should define the activity as illegal gambling. A player could be injured, a star receiver could drop the ball, weather could affect scoring and referees are known for making erroneous calls. Can we not consider the “chance” of these anomalies occurring to be random enough to deem DFS gambling?

While the CGA is doing everything it can to convince lawmakers that DFS sports is a gambling activity that must be regulated, the opinion of attorney Chad Finkelstein seems a bit more realistic, at least for the moment.

“No court has had to interpret the Criminal Code to give us an answer one way or another.” At this point in the game, said Finkelstein, “We’re just having educated guesses.”

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