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Canadian DFS Industry Under Fire

DraftKings1Canadians love their sports. And even more than loving their sports, they love betting on their sports. It should come as no surprise that the number of Daily Fantasy Sports (DFS) players continues to explode across the nation.

But in recent years, DFS has run into a slew of legal issues stemming from its interactions with sports betting laws. Up until now, sites such as DraftKings have been able to operate with relative impunity from legislation seeking to regulate gambling online.

However, there is some evidence that after years of leaving well enough alone, the government is beginning to think about getting back to its old habits of meddling anywhere it thinks it can find a tax dollar:

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What Is a Sports Bet?

The issue surrounds whether or not DFS can be defined as sports betting. It’s an important question because sports betting is largely outlawed in the United States.

Industry advocates argue that DFS is not sports betting because that de facto requires a wager to be placed on the outcome of a sporting event, which does not happen in DFS. Their line of reasoning is that DFS places wagers on the performance of players, which is outside the scope of the traditional definition.

Speaking to the CBC, Paul Burns of the Canadian Gaming Association summed it up thus, “we believe it’s a gaming product because of how the Criminal Code defines a gambling product in Canada.”

US Industry Facing Similar Issues

This type of meddling in what has quickly become a favorite pastime already has precedent with our friendly neighbors to the south.

Several US states have intervened to either close or regulate DFS in the US. Most notable among them is Nevada – a haven for sports betting – that passed a law requiring DFS companies to obtain a license (with its attendant fees) in order to continue operating.

NY, Texas, and other states quickly followed suit with similar new legislation targeting operators.

DFS Not Prioritized By Canadian Law Enforcement

To date, such actions have been slow to materialize in Canada. Experts attribute this to an ordering of law enforcement priorities faced with a chronic funding shortage.

For now, the official un-official policy seems to be that as long as operators don’t setup shop within Canada itself, no action will be taken.

But given the explosive growth of the industry, it remains to be seen how long that will stay the case.

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