Pulling up stakes

Our friends in Ontario, we have good news and bad news for you. The good news is, as we reported a couple months ago, you are about to get legal, privatized, online gambling starting on April 4! As someone who lives in a state with no legal online gambling, I look to the north full of jealousy. Unfortunately, you can’t have your cake and eat it, too. Because Ontario online gambling sites will be ring-fenced, FanDuel is shutting down its daily fantasy sports site in the province as of Friday, April 1.

“Due to a change in government regulations, FanDuel will not be able to offer paid or free daily fantasy contests in the province of Ontario starting on April 1st,” said FanDuel on its website. “Ontario residents can participate in daily fantasy contests while physically located in other provinces and within US states where daily fantasy is permitted. Additionally, Ontario residents will be able to utilize the FanDuel Sportsbook and Casino products launching in Ontario beginning April 4th.”

Limited player base doesn’t work

So why is this an issue? In a ring-fenced environment, the only people who can play on the Ontario sites are those located within the province’s borders. Additionally, Ontario sites are not allowed to link up with sites in other provinces or countries, so while Ontario’s population is sizeable, what you see is what you get. And because DFS is a player-versus-player endeavor, a site needs a large player base in order to success. Hence why Flutter Entertainment, the parent company of FanDuel, is pulling the plug on DFS in Ontario.

It’s the same situation for online poker, though it does not appear that Flutter will shut down PokerStars in Ontario. Imagine walking into a real, live poker room – you see dozens upon dozens of tables, each of them full. The poker room is bustling and there are plenty of games at a variety of stakes. You will probably stick around because it looks like a great place to play. But say you walk in and there are three tables, all short-handed, maybe one of which just has three players, each of whom looks ready to leave. You wouldn’t waste your time.

And that’s the problem with ring-fencing. Online poker requires player traffic to maintain player traffic. Now, Ontario is large enough to sustain a couple online poker rooms – it would be one of the largest states in the US – but Monday is not going to feel very good for players, who will see game availability shrink significantly when players from other countries and around Canada aren’t there anymore.

FanDuel is likely keeping PokerStars in Ontario, but removing DFS because attractive DFS contests require many more players than do decent poker games. A big part of the appeal of daily fantasy sports are the huge guarantees the sites offer and FanDuel/Flutter probably did the math and figured they just could not offer that anymore.

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