The Uneven Treatment of iPoker and DFS in the US

Home » Poker News » The Uneven Treatment of iPoker and DFS in the US

Wednesday, December 21st, 2016 | Written by Adam Brown

Daily fantasy sports betting and online poker have received unequal treatment from state legislatures despite the fact that the two games are similar. On a player level, the two rely on outside luck, as well as player skill to win, and cannot be thought of purely as games of chance. In addition, both games represent large industries in which just a handful of powerful companies dominate the market.

Unequal Treatment

While on the surface it would seem that lawmakers should view daily fantasy sports betting and online poker in much the same way, last year has shown that the reality is in fact very different. Take the state of New York, for example. Lawmakers in Albany have been arguing over whether or not to legalize online poker for years, without ever having accomplished much progress. Meanwhile, bill S8153 to legalize and regulate online daily fantasy sports betting sailed through both the house and senate and was signed by the governor in just a matter of months. Furthermore, states that are not even actively considering online poker legislation have either passed daily fantasy sports betting laws, or are considering doing so.

So what’s the difference? Here are some of the key points of comparison:

1. History of Compliance Versus Noncompliance

When the United States banned online poker at the federal level, many online poker operators did not comply with the law by blocking their sites. Brands such as PokerStars and Full Tilt continued to accept players from the United States, and ultimately had to be blocked by the U.S. government in what is now known as Black Friday. By comparison, Fan Duel and Draft Kings have generally complied with restrictions on play, and when states have temporarily banned access, they have blocked players from those areas. Some lawmakers say that this shows that the industry is ethical, while online poker has proven to be otherwise.

Elaborating further, poker & gaming consultant Steve Ruddock explains: “The key takeaway for DFS operators is to not test law enforcement in the US. You may think you have everything figured out, but eventually they’ll come down on you. Thus far, FanDuel and DraftKings have pushed back and challenged, but are still conforming with whatever laws states have passed.”

2. United Voice Versus Conflicting Opinions

Daily fantasy sports betting has a strong base of support, with the professional sports leagues also behind the industry, and advertising bringing in millions of dollars in revenue each year. Online poker, on the other hand, does not have a strong, unified voice calling for legalization on a large scale. Instead, some of the world’s largest land-based casino operators, like the Sands Las Vegas run by Sheldon Adelson, actually oppose online poker and are tirelessly lobbying to have the industry banned.

3. Public Opinion

Daily fantasy sports betting grew out of offline fantasy sports betting, such as office pools where people contribute a few dollars and pick teams to see who wins. It has a positive, harmless connotation and a good image overall, even though the sites are much different than those offline friendly fantasy sports leagues. Poker, on the other hand, has a much different aura associated with it. People picture poker as being gambling, something that’s done in a casino or in back alley card rooms. As a result, online poker legislation seems to be a bigger cause for concern than daily fantasy sports betting, even though the chances for addiction, abuse and major losses are not that much different.

Revenue Potential

There also exists a discrepancy in the amount of potential revenues that can be generated from each individual industry. Online poker enjoyed a boom between 2003 and 2006, and by 2010 the global market was worth just short of $5 billion. That figure has since declined, especially following Black-Friday, and in 2014 that number had dropped to $3.87 billion, with current forecasts for 2019 suggesting world revenues of $3.22 billion.

By contrast, the daily fantasy sports industry is currently thought to be worth around 2.7 billion, according to Juniper Research, with around 75% of its market derived from the 50 million or so Americans who play the game. The market is also on an upward trajectory, and is expected to increase to $5.3 billion by 2021.