Ontarians have more than 30 provincially regulated online sportsbooks awaiting their business this NFL season.
However, Ontarians will have zero provincially regulated options for paid daily fantasy sports contest, barring some sort of legal miracle between now and when the Dallas Cowboys and Philadelphia Eagles begin the NFL regular season Thursday night.
- Ontario sports bettors still have no provincially regulated options for paid daily fantasy sports (DFS) contests.
- Since April 2022, major DFS operators like DraftKings and FanDuel have declined to offer paid contests in Ontario due to provincial regulations and federal law.
- A potentially game-changing court case could allow Ontario DFS players to compete with users outside Canada, but a decision is still pending and likely to be appealed to the Supreme Court.
The DFS status quo in Ontario this year will be no different from the start of the 2022 regular season, the 2023 regular season, and the 2024 regular season because there are no locally regulated DFS sites in Canada's most populous province.
This has been the case since April 2022 when the new Ontario sports betting and iGaming market launched, bringing multiple private-sector operators under provincial oversight.
Ontario’s rules for iGaming treat paid DFS as gambling and therefore require companies that offer contests to register with the local regulator and pay an approximately 20% tax on revenue, as an online sportsbook or casino would. Moreover, the province’s regulations require all participants to be physically located in Ontario, thus restricting the size of DFS contests.
These conditions, the Alcohol and Gaming Commission of Ontario (AGCO) has acknowledged, has prompted iGaming operators (such as DraftKings and FanDuel) to ditch “pay-to-play” fantasy sports.
Instead, former DFS operators in Ontario offer only their online sports betting and casino products. Other DFS companies, such as PrizePicks and Underdog, have steered clear of Ontario altogether.
“Choosing whether or not to offer pay-to-play fantasy sports is an individual business decision that rests with registered operators,” the regulator says. “The AGCO is committed to ensuring Ontarians can safely and responsibly enjoy their favourite sports betting products, including pay-to-play fantasy sports offerings, in Ontario’s new igaming market.”
All of this is an irritant to DFS fanatics in Ontario who prefer setting lineups to placing SGPs. While they have many provincially regulated options with which to do the latter, for the former, they have nothing.
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
For now, at least.
There is a potential landmark court case ongoing that could change all of this. That case, or reference, involves the Ontario government asking the province’s Court of Appeal if it would be legal to let online gamblers play with people outside of Canada.
If the court were to say yes (and the province thinks it should), then a DFS operator could link Ontario DFS players to DFS players in the U.S. or further abroad. Then, it would potentially make more financial sense to operators to again offer paid fantasy sports contests in Ontario. It would also provide for a deeper pool of online poker players in the province.
“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,” an executive for PokerStars and FanDuel owner Flutter Entertainment PLC said in a May 2024 affidavit tied to 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.”
In short, Ontario sees a way for its players to remain regulated and protected by the province while playing with gamblers outside of Canada who would be regulated and protected by their local systems.
Trailblazing can burn
This is particularly notable because Ontario is the only province in Canada with a regulated iGaming market that permits multiple private-sector operators to participate. It is an island of private-sector competition in a sea of government-authorized monopolies.
Ontario’s “scheme,” so to speak, is one of one in Canada, and the province now wants to link it to schemes outside Canada. It could also link the scheme to a similar one in Alberta that is being developed but won’t launch until next year. Ontario could also connect with other provinces if it is ever so inclined.
“Our position is the game is two schemes interacting with each other,” said Josh Hunter, a lawyer for Ontario’s Ministry of the Attorney General, during a hearing on the court reference last November.
By allowing operators to provide bigger poker games and paid DFS contests to provincial gamblers, Ontario could pull even more players onto its regulated iGaming sites. That is, after all, one of the main reasons for launching a regulated iGaming market - to get gamblers out of the "grey" and "black" markets and into a fully regulated one.
“We believe it would better protect the people of Ontario,” argued Ananthan Sinnadurai, another lawyer for the AG’s office, during last November’s hearing.
ETA TBD
However, a decision has been outstanding since the hearing last November when the Court of Appeal judges listened to arguments regarding the “online gaming and international play” reference.
There is no indication of when that ruling will be delivered either. There’s also no guarantee that if the decision were issued tomorrow (the court’s website suggests it won’t), that DFS would suddenly spring back to life in Ontario.
Furthermore, it is likely (if not certain) that whatever the Court of Appeal decides, it will be appealed to the Supreme Court of Canada.
“There is a provision in the Supreme Court Act which creates a right of appeal to the Supreme Court of Canada from the Court of Appeal's decision in any reference question, which means the likelihood of this case ending in the Court of Appeal for Ontario is, I think, relatively low,” said Adam Goldenberg, a partner at McCarthy Tétrault LLP, during a panel at this year’s Canadian Gaming Summit in Toronto.
The court records for Ontario's DFS/poker reference include a lot of Parliamentary debate about Canadian gambling law. Here's a lawyer in 1985 explaining the rationale for Canada's longstanding (but now gone) ban on single-game betting. No "funny games," please, we're Canadian. pic.twitter.com/PYOLuBRaCa
— Geoff Zochodne (@GeoffZochodne) July 26, 2024
As the above quote suggests, this is complicated stuff.
No one else in Canada has done what Ontario has done with iGaming, and no one else is asking to do what Ontario is asking to do in sharing "liquidity" (also known as "gambling money") with international jurisdictions. Moreover, the Court of Appeal doesn’t get asked questions by the provincial government every day, or even every year.
“The form of the case is unusual,” said Danielle Bush, senior counsel at McCarthy Tétrault LLP, during the Canadian Gaming Summit. “I think that we determined that the Court of Appeal in Ontario had only heard another reference case 17 years ago.”
A lot has been thrown at the Court of Appeal as well.
While there is a “yes” side in the reference (the Ontario government and private-sector online gambling companies), there is also a “no” side, which is several government-owned lottery and gaming corporations (albeit not the Alberta and Ontario lotteries).
These lotteries are members of the so-called Canadian Lottery Coalition. And these lotteries, such as the British Columbia Lottery Corp., have a bone to pick with Ontario and its licensed iGaming operators.
That is because these lotteries and their iGaming sites, such as BCLC's PlayNow, have government-authorized monopolies for regulated online gambling in their home provinces. Even so, they say they find themselves competing for business against Ontario-licensed iGaming brands that are taking bets in provinces that are definitely not Ontario.
These lotteries are concerned, as the coalition’s executive director said in an April 2024 affidavit, that the Ontario liquidity reference “could lead to the further proliferation of illegal online gambling."
Bad Bodog!
These concerns were voiced during the DFS-related hearing before Ontario's Court of Appeal last November.
However, it's not just in Ontario where the lottery coalition has been active in the courts, as the Manitoba lottery won an injunction against offshore sportsbook Bodog in May. That decision has reportedly been sent to the appeals judges in Ontario for the DFS-related reference, potentially giving them one more thing to consider.
That is because the issue of unregulated operators was something asked about during Ontario’s liquidity reference, and the lack of a decision against an offshore sportsbook was duly noted at the time.
Now, there is a decision, and it may be one that the five-judge panel in Ontario's top court is mulling over as it pertains to "online gaming and international play."
“They've (the lotteries) gone back now and they've said, ‘OK, we did it, and here's what the court in Manitoba said,’” Bush said. “It is certainly strategic. And the next year or so is going to be really, really important for everybody in the industry, as this plays out, frankly, across the country.”
