The Toronto Maple Leafs have sought legal advice in recent days about whether daily fantasy sports gaming is legal in Canada.
Leafs are looking for confirmation that services offered by companies
such as DraftKings and FanDuel are legal in Canada, three people
familiar with the matter told TSN. Both DraftKings and FanDuel already
operate in Canada, offering their gaming services even though some legal
experts say it's "murky" whether they are operating within the confines
of the law.
The fact the Maple Leafs are seeking legal
advice suggests Canadian NHL teams could be close to following the lead
of U.S.-based sports teams and leagues, including the NHL itself, by
signing sponsorship partnerships with fast-growing fantasy sports gaming
Deals signed by NHL teams in the U.S. with fantasy sports companies are worth more than $1 million, an NHL source said.
"This is a new category; it's found money," the source said.
Maple Leafs spokesman Dave Haggith declined to comment.
FanDuel spokeswoman Emily Bass said her company is attracting customers in Canada.
"We're not going to comment on Canadian teams we're taking to, but we are already in the Canadian market," she said.
A DraftKings spokeswoman did not return an e-mail requesting comment.
as NHL teams look to a new revenue stream, officials with the Canadian
Gaming Association (CGA), a trade group whose stakeholders include
casinos, are crying foul.
The CGA says it plans to begin
discussions with bureaucrats across Canada to make the case that the NHL
and other leagues are being hypocritical.
On one hand, the
NHL has said it opposes legalized single-sport event betting. It's
unclear whether the league's opinion was influential when Bill C-290
died in the Senate. That federal bill, first introduced three years ago,
would have legalized single-sport event gambling in Canada.
CGA now wants the federal government to re-examine Canadian gaming laws
and says the NHL is wrong to oppose single-sport event betting while at
the same time partnering with fantasy sports gaming companies.
official Paul Burns says it's unclear whether daily fantasy sports
games are "games of skill," as the companies say they are, or if they
represent "games of mixed skill and chance." If that's the case,
Canadian law says the provinces must regulate the games.
Criminal Code says games of chance and skill need to be conducted by
the government and their agents," Burns said in an interview. "Is it all
skill involved in picking players? Is there any luck involved?
It's a murky area."
said his group's efforts are an effort to "bring clarity to what's
legal" and that he wants to highlight "the holes in the law."
with the possibility Canada will pursue an Olympic bid for 2024 and a
FIFA Men's World Cup two years later, Burns said Canada needs "laws and
regulations around match-fixing and sports wagering in place for those
bids to be successful."
FanDuel and DraftKings have both
argued that players' knowledge and skill are the bedrock of their games,
as opposed to pure luck. And while U.S. courts have found fantasy games
are games of skill, the legal test is different in Canada, Burns said.
or not single-sport gambling is legalized in Canada, the fantasy sports
gaming industry is becoming a juggernaut. In 2013, 41.5 million players
in the U.S. and Canada participated in daily fantasy sports games,
according to the Chicago-based Fantasy Sports Trade Association.
growth of fantasy sports comes at an opportune time, as leagues are
increasingly sharing advanced analytics and statistics. Fantasy sports
companies say their customers who win games are often those who make the
best use of data and statistics.
Players are typically given
a salary cap to work with, which they cannot eclipse, and then assemble
a lineup of players who accumulate points based on their performance in
real professional sports games played that day.
It can cost between 25 cents and $1,000 to enter single daily games, and total prizes for a game can range up to $1 million.
FanDuel has paid out more than $600 million worth of prizes to players since it started in 2009.
The lure has been too much to resist for U.S. teams and leagues.
League Baseball already has an equity stake in DraftKings and offers
daily contests on MLB.com. The NBA has an exclusive deal with FanDuel.
in November, the NHL announced a multi-year partnership with
DraftKings, which also has deals with the Boston Bruins, St. Louis Blues
and New York Rangers.
The teams and leagues covet a
connection to fantasy sports because players who participate in those
games tend to be more engaged and connected to live events.
really hasn't been a court case in relation to whether fantasy sports
is a game of skill or not," said Michael Lipton, a Toronto lawyer who
has worked for the Canadian Gaming Association. "Some observers in the
U.S. have said it isn't, but the courts haven't decided."
2006 Unlawful Internet Gambling Enforcement Act includes language that
permits daily fantasy gaming, but its future is not certain. Some U.S.
states still do not have specific legislation authorizing fantasy sports
contests played for money, Lipton said.
Some websites are
run by people with backgrounds in online poker, which is now illegal in
the U.S., The New York Times reported in 2014.
Lipton said U.S. courts could easily get involved and decide the fate of the industry in a civil suit.
a player files a civil lawsuit and sues on the basis he or she has lost
money on the game, they may argue the game is not legal and they are
entitled to get their money back," Lipton said.
Canada, the issue of whether daily fantasy sports gaming is legal was
debated last week at a legal seminar in Windsor, Lipton said.
"There are risks. This hasn't been determined in Canada by any particular court," he said.
unclear whether FanDuel and DraftKings have been sued in the U.S. by
any customers who have lost money, but both companies face potential
class-action lawsuits related to allegations of false and misleading
DraftKings was sued earlier this month in Boston by James Gardner, who is seeking more than $5 million.
said in court filings that he deposited $10 with the website on Apr. 6,
2015, after reading on the company's website that he would receive a
"100 per cent first time deposit bonus."
"As part of this
advertising scheme, DraftKings represents that up to $600 of a user's
initial payment will be immediately matched by the site," Gardner's
complaint said. "For example, if they deposit a payment of $100,
consumers will immediately have $200 with which to enter DraftKings'
Gardner alleges, however, that the bonuses are
only a small amount, "4 per cent or less of every dollar they spend"
and that DraftKings' promotion claims are "unfair and deceptive..."
DraftKings has not filed a statement of defence.
FanDuel faces a similar lawsuit.Read more...