Canadian online gambling operator Amaya Gaming has withdrawn its StarsDraft daily fantasy sports operation from all but four US states, citing regulatory developments.
On Monday, Amaya issued a statement saying StarsDraft would restrict its real-money DFS contests to US customers located in New Jersey, Massachusetts, Kansas and Maryland, the four states Amaya says have “favorable existing daily fantasy sports guidance.” The move follows StarsDraft’s recent exits from both Florida and Nevada, which were prompted by a federal grand jury investigation and state regulators declaring that DFS operators needed gambling licenses, respectively.
Amaya says the exit wouldn’t have a negative financial impact, as StarsDraft only launched in September, following Amaya’s acquisition and subsequent rebranding of Victiv’s DFS business, and the site has yet to gain much traction against the DraftKings/FanDuel duopoly.
Amaya’s efforts to keep its DFS nose clean have far more to do with improving its chances of finding favor with state gaming regulators who might be considering passing real-money online gambling legislation. Despite Amaya’s 2014 acquisition of the PokerStars and Full Tilt brands, opponents say there is still a whiff of impropriety surrounding the brands, both of which featured prominently in the 2011 Black Friday online poker indictments.
DRAFTKINGS RISKING FELONY PROSECUTION IN NEVADA
Meanwhile, DraftKings is taking its time exiting the Nevada market. Last Thursday, gaming regulators issued a cease & desist letter to all DFS operators, and most sites – including FanDuel and StarsDraft – swiftly complied. Yet Legal Sports Report found that Nevada players could still access DraftKings over the weekend.
A DraftKings spokesperson told the New York Times that because the company allowed late swaps, it had decided to allow players who’d already entered that week’s NFL games prior to the C&D letter “to continue their full experience with the product until games close and are paid out on Monday night.”
On Monday, Nevada Gaming Control Board chairman A.G. Burnett told the Las Vegas Review-Journal that DraftKings “have been working with us” to fix the issue but if the situation wasn’t resolved quickly, Burnett would “ask the attorney general’s office to prosecute them.”
GEORGIA LOTTERY DEMANDS ANSWERS
Out east, the Georgia Lottery Corp is getting no satisfaction from either DraftKings or FanDuel. On Monday, the Associated Press reported that Lottery attorney Joseph Kim had sent a letter to both companies last month advising them that their operations appeared to be in violation of state law, which restricts gambling operations to the Lottery.
Kim said he hadn’t received a response from either DraftKings or FanDuel by the Oct. 16 deadline stipulated in the letter. Georgia Lottery officials are reportedly considering their next step.
Georgia is one of the few state lotteries currently doing business on the internet, so the state’s motivation is far more than legal curiosity. The state launched its online Diggi Games earlier this year, featuring a variety of interactive instant win games from the likes of Gtech and Contagious Gaming. The Lottery reported record profits of $253.9m in its fiscal Q1 ending Sept. 30, although it didn’t break out what portion of its earnings came from its online operations.
