PokerStars Preparing To Launch DFS In The US

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Monday, July 20th, 2015 | Written by Lucy Brown

PokerStars was forced to exit the US online poker market in 2013 following a Department of Justice crackdown on unlicensed offshore operators, but now the world’s biggest poker room may soon make a much anticipated return to the USA. However, while PokerStars is not expected to receive a New Jersey iGaming license until November, the Amaya Gaming owned site has busily been preparing a daily fantasy sports (DFS) platform and this week many of its pre-Black Friday US customers were emailed an in-depth survey designed to gauge the demand for a PokerStars DFS product. Timing of the move comes just ahead of the National Football League’ (NFL) season kick-off in September, and as Amaya CEO David Baazov explained back in March:

“We have also taken the strategic decision to enter the daily fantasy sports category and are pursuing parallel tracks of internal development and strategic acquisition.. [we] see a clear crossover from poker and daily fantasy sports.”

DFS A Natural Fit For PokerStars

A crossover clearly exists between the DFS and online poker markets, and amongst the similarities which make the industries a natural fit for one another is the fact both markets require a skill-divided, liquidity-driven ecosystem, while the sites themselves need an internal system able to cope with short-term traffic loads involving simultaneous connections. This crossover was highlighted further at the 2015 WSOP in Las Vegas as DraftKings was named the competition’s official daily fantasy sports site with its branding subsequently visible all over the hugely popular poker tournament series. DraftKings even ran a number of promotions giving players a chance to win entries into various WSOP tournaments, and one of this year’s WSOP Main Event November Nine, professional poker player Max Steinberg, actually won his $10,000 buy-in seat through a DraftKings.com promotion.

The Survey

Following a brief introduction from PokerStars its email requested recipient to carry out a DFS-based survey, but curiously many of the questions posed gave the impression of a company as of yet undecided whether to proceed with the launch. One question, for instance, asked: “If PokerStars were to offer Daily Fantasy Sports how likely would you be to play on PokerStars or a PokerStars’ backed site?”. Respondents were also asked about the full range of DFS possibilities, including Golf (PGA), Soccer, Hockey (NHL), Basketball (NBA), Baseball (MLB), Nascar, and Football (NFL), and indicating that the survey was primarily aimed at U.S. residents the survey asked: “Are you aware that Daily Fantasy Sports games are now legal to play for real money in the US?”

Implications Of A PokerStars DFS Entry

When the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006 online poker was prohibited while an exception was made for fantasy sports which was differentiated from other gambling games. One reason may have been the fact DFS was still in its infancy at the time, but over the years the market has grown exponentially and in so doing has attracted a greater level of attention from the US government. Therefore, if PokerStars does launch its DFS product stateside, policymakers may begin to view daily fantasy sports in a different way altogether, and in particular scrutinize how close the activity is to a legal definition of gambling. A further incentive to reign in the industry may come if PokerStars is able to quickly establish itself as a leading DFS company, a distinct possibility considering the financial resources Amaya Gaming controls, as well as its technological capabilities.

PokerStars DFS A Good Bet

PokerStars enjoys a strong brand reputation both stateside and around the world, which together with is huge player base of more than 86 million customers gives it the potential to enjoy a truly explosive launch within the DFS market, an industry whose number are presently estimated to include 2 million unique customers. In fact, industry experts, such as financial analysis firm Seeking Alpha, recently advised its subscribers to invest in Amaya Gaming stock in preference to the DFS current industry leaders Draft Kings and FanDuel. Tipping Amaya as a “strong possibility for a far better bet on bigger gains” than these other operators, a Seeking Alpha statement read:

“We believe Amaya is better positioned longer term to generate more cash with less cost in launching a fantasy sports business than the two major fantasy sports operators edging toward IPOs. With a reported 68 million registered users in poker, already available in 30 languages and a market cap of $3.66 billion (US), we like their potential positioning against newly minted DraftKings and FanDuel shares when they become public companies.”