BCLC wants Better Gaming? Regulate Daily Fantasy Sports

Earlier this week, we talked about a new contest of sorts offered by the British Columbia Lottery Corp (BCLC), in which innovative games developers are invited to submit their ideas for new social gambling games. Today, we’ll expand on that topic with some strong advice for BCLC: Regulate Daily Fantasy Sports.

The purpose of the initiative, InnovateBCLC, is to give provincial gaming regulator a new stream of players, and thereby a new stream of revenue. They want something new, something fresh, something friends can do together online, and most of all, something that will attract today’s “millennial-age” gamblers.

Daily fantasy sports, or DFS for short, could be the perfect solution.

Why BCLC Needs Daily Fantasy Sports

The leading DFS operators, DraftKings and FanDuel – set to merge into a single entity later this year – provide a wagering system that meets almost all the elements BCLC is looking for.

They want a social game. DFS allows players to set up their own private leagues and compete directly with friends.

They want the game to utilize real money wagers. Players can participate in DFS for as little as $0.25, ranging up into the hundreds of dollars.

They want it to fit the 3 elements of gambling, stake, reward, and chance. There are currently no specific laws on the books for daily fantasy sports, making it an easy fix for legislators. Define DFS as a game of chance, and you’re good to go.

Even if Canada were to define DFS as a game of skill, as some jurisdictions have, lawmakers can still place regulations on it to collect licensing fees and taxes. It could bring in millions of extra dollars a year.

Missed Opportunity for Revenue Growth

There’s only one category BCLC is looking for that daily fantasy sports doesn’t fit into. It’s not ‘new‘ and ‘innovative‘. But it is a significant revenue stream that’s experienced exponential growth in the last decade, especially among the millennials BCLC is hoping to attract.

According to reports from operators, there were approximately 18 million DFS players in North America in 2006. That figure grew to 29.9 million in 2008, 35.9 million in 2011, and 57.4 million in 2016. DFS is clearly an expanding market.

Other statistics showed that in 2015, 20% of Americans played some form of DFS. Nearly twice as many of them were teenagers than adults. Thu DFS clearly fits the bill for attracting millennials.

DFS has outgrown traditional fantasy sports by leaps and bounds, as well. In 2012, the average DFS bettor spent just $5, while participants averaged $60 on traditional fantasy sports. By 2016, DFS was bringing in $318 per player, with $184 going to traditional fantasy sports.

Current Status of DFS in Canada

As of right now, daily fantasy sports is thriving across Canada, because it is not illegal, but it is not regulated either. DraftKings, FanDuel and other operators are making millions of dollars in the True North. That’s millions of dollars federal and provincial governments aren’t collecting any form of taxes on.

It’s time for the government to wake up and take advantage of an available revenue stream that’s sliding right through their hands. Regulate DFS. Require operators to obtain a license. Collect taxes on all that revenue. The BCLC and other provincial gaming regulators would be crazy not to.