If you’re someone who has emailed or tweeted me asking when Ontario will bring back paid daily fantasy contests, this is for you.
Listen, I love talking about the online gambling business. It’s what I do. I’m just getting a lot of the same questions and repeating the same answers.
So, this is my attempt to provide those answers in a convenient, easy-to-bookmark article about what's going on with DFS and sports betting in Ontario.
If you still have questions after reading this, it might just be that there aren’t any answers yet to give, but they’re coming.
Let’s begin, then.
What’s going on?
Regulated daily fantasy contests in Ontario have more or less vanished because of rules that took effect in 2022.
Major DFS operators such as DraftKings and FanDuel shuttered their DFS businesses in the province, and others, such as PrizePicks and Underdog, are unavailable as well.
Potentially big news for Ontario-based daily fantasy and poker fans: the provincial government is asking the Court of Appeal whether allowing residents to participate in online games and betting involving people outside of Canada is legal. https://t.co/sv2ouYlVQY pic.twitter.com/Eanx9zgAS0
— Geoff Zochodne (@GeoffZochodne) March 12, 2024
The Ontario government is looking to make a change and bolster other forms of online gambling affected by the new rules, which also sparked a boom in the number of regulated sportsbooks and casino gambling sites in the province.
So, Ontario has a question it wants answered by the province’s Court of Appeal. Depending on that answer, paid daily fantasy contests could return to the province (and online poker games could get a lot bigger as well).
The exact question Ontario is asking is this: “Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada as described in the attached Schedule [to the Order-in-Council]? If not, to what extent?”
What? Why doesn’t the province just say it’s legal then?
Well, that’s because the province isn’t sure, even though the Ontario government thinks it should be legal to let local players compete against people outside the country.
This is partly because of Canadian law, which leaves regulation up to the provinces but within a legal framework set by the federal government's Criminal Code.
“While Ontario would like to permit players participating in legal online gaming and sports betting to participate in games and betting involving players outside of Canada, there is uncertainty about whether doing so would be consistent with the requirements of the Criminal Code as they have been interpreted to date,” said a provincial government order referring the DFS question to the Court of Appeal.
This has happened before. For example, the Ontario government announced in 2018 that it would ask the Court of Appeal if the federal government’s “carbon tax” legislation was constitutional.
When are we getting an answer? And when can I play DFS again?
A hearing for the online gambling reference is scheduled for late November. An answer from the judges will follow. Exactly when is to be determined.
For an idea, though, Ontario's carbon tax reference was heard in mid-April 2019. A decision was issued near the end of June that year. So it could be weeks or even months before we get an answer.
However, if the answer is ultimately “yes, online gambling is legal if you’re playing against someone outside Canada,” well, you and I could be competing again against folks in Alaska or California in a DraftKings or FanDuel DFS contest. How long before that happens would be up to the operators.
Players from other Canadian provinces, which have different rules for online gambling, would be excluded from the games unless Ontario reached an agreement with other provincial governments. Those haven't been struck yet.
“Using poker as an example, a player in Ontario would be able to sit down at a virtual poker table and compete with players from around the world,” said George Sweny, vice president of regulatory affairs for a division of FanDuel-parent Flutter Entertainment PLC, in a May 31 affidavit filed in connection with the court reference. “Similarly, if daily fantasy sports were to be offered, an individual in Ontario could wager and participate in a daily fantasy sports league involving individuals from outside of Canada.”
However, if the Court of Appeal’s answer is “no,” or “yes, but,” Ontario may have to take its question further up the legal food chain and try to get another answer from the Supreme Court of Canada. That would take longer. Again, TBD on how long exactly.
So, why can’t I play DFS in Ontario now?
The short answer is that provincial regulations that took effect in April 2022 require all contestants to be in Ontario. Therefore, the player pool is too small to make it worthwhile for major operators such as DraftKings and FanDuel.
Now here’s the long answer
Per the Alcohol and Gaming Commission of Ontario (AGCO), which regulates iGaming in the province, so-called “pay-to-play” fantasy sports contests are considered gambling under the federal Criminal Code.
That doesn’t mean paid DFS is illegal in Ontario. What it means is that it falls under the AGCO’s oversight and that contests are allowed so long as they abide by the regulator’s standards.
If operators want to offer those contests, they need to register with the AGCO and pay the $100,000 fee per site, which they will have to pay again every year. Operators must also sign a contract with another government agency, iGaming Ontario, which requires companies to turn over approximately 20% of their revenue to the province. Those financial requirements may be too much for potential DFS operators.
Moreover, once operators are registered with the AGCO, they must follow the regulator’s rules. One of those standards states that “[g]ames on gaming sites shall be provided only within Ontario, unless they are conducted in conjunction with the government of another province.”
In other words, an Ontario-regulated online gambling site can only offer its games within the province. And since DFS qualifies as gambling, that means paid daily fantasy contests would be subject to that rule.
“Choosing whether or not to offer pay-to-play fantasy sports is an individual business decision that rests with registered operators,” the AGCO says.
So, an Ontario-regulated DFS site could only run contests involving players in Ontario. This just restricts the size of those contests and makes for a less attractive product for operators that make their money from the rake, or the percentage of entry fees they keep for themselves.
The limits on where players from DFS contests can come from is something that FanDuel said “would severely limit the size of future contests, and lead to significantly smaller prizes - a product we know will not be attractive to our players in Ontario.”
ICYMI: the B.C. government has withdrawn from Ontario's court reference regarding DFS/poker.
— Geoff Zochodne (@GeoffZochodne) September 23, 2024
The exit removes a potential opponent to Ontario's plan to allow online gamblers in the province to compete against players outside Canada:https://t.co/eSf3bogFZP @Covers
Ontario launched its new regulated market for online sports betting and casino gambling in April 2022. Since DraftKings and FanDuel are participants in that market and follow its rules, they’ve stopped offering DFS contests in the province (and began offering sports betting and online slots and table games). Other DFS operators have done the same or steered clear of Ontario altogether.
“We understand that operators are not currently offering pay-to-play fantasy sports primarily because of their inability to allow individuals not located in Ontario to access the regulated Ontario offering (i.e. pooled liquidity),” the AGCO says on its website.
What happens next?
We wait until the hearing in November and then for a decision afterward.
While we have had legal back-and-forth between interested parties about evidence (and one party, the British Columbia government, has withdrawn from the reference), the hearing date remains unchanged. It's scheduled to run from Nov. 26 to Nov. 28.
In the meantime, due to the same regulations that stifled DFS, Ontario has 50 operators and more than 80 regulated gaming sites offering sports betting, casino games, and poker. Maybe give them a whirl. Responsibly, of course.
