StarsDraft Shuts Down in All But Four States

StarsDraft has announced on Monday that they will halt operations in all but four states. This is the most dramatic reaction to date on the increase in scrutiny by regulators and lawmakers on the offerings of Daily Fantasy Sports.

StarsDraft Statement

StarsDraft released a statement early Monday morning:

Amaya Inc. (Nasdaq: AYA, TSX: AYA) (“Amaya”) has announced that it is limiting its daily fantasy sports (“DFS”) brand StarsDraft from operating real money games and tournaments in most U.S. states following a review of recent developments in a number of jurisdictions. The decision is not anticipated to have a negative financial impact on Amaya. StarsDraft players in all jurisdictions will continue to have access to the funds in their online accounts, which are available for withdrawal at any time.

We will actively monitor developments and work with all states interested in implementing clear guidelines for the operation of daily fantasy sports in their jurisdiction. In the meantime, StarsDraft intends to focus operations in states with favorable existing daily fantasy sports guidance, including New Jersey, Massachusetts, Kansas, and Maryland.

Why is StarsDraft Still Offering Gameplay in These Four States?

Amaya, the parent company of StarsDraft, has determined that New Jersey, Massachusetts, Kansas, and Maryland have more legal clarity than other states in regards to the daily fantasy sports industry.

Kansas

Kansas passed a bill earlier this year, which fully legalized and regulated fantasy sports gameplay and playing it for real money.

Maryland

Maryland passed a law in 2012, which allowed fantasy sports websites to offer gameplay to residents legally. The language of this law was modeled after the UIGEA.

New Jersey

This state passed a law in 2013 to adequately regulate and legalize fantasy sports within its borders.

Massachusetts

Maura Healey, Massachusetts’s governor, asserted that daily fantasy sports gameplay was legal within the state.

Why StarsDraft Made This Decision

Unlike the majority of other daily fantasy sports operators, StarsDraft is the venture of a billion dollar gambling company, Amaya, which also operates the mega success PokerStars. This puts StarsDraft in an entirely different situation than other DFS operators like DraftKings or FanDuel.

It also likely doesn’t help that Amaya was burned once before when PokerStars was banned from operating in most states. This all puts Amaya in a whole different reward/risk calculus.

Meanwhile, DraftKings is Risking Felony Charges

DraftKings is taking their time in leaving the Nevada market. Last week, Nevada gaming regulators called for a cease and desist to all daily fantasy sports operators, and most websites, including StarsDraft and FanDuel, complied right away. However, players residing in Nevada still had access to DraftKings this past weekend.

DraftKings made a statement that they have decided to allow players “to continue their full experience with the product until games close and are paid out on Monday night.” On Monday, A.G. Burnett, the Nevada Gaming Control Board chairperson, stated that if DraftKings did not resolve the situation quickly, the attorney general’s office was prepared to prosecute.

Conclusion

It seems as though the DFS industry is in for a bit of an upheaval, and these two websites took very different approaches to handling the somewhat hostile environment daily fantasy sports is currently in. We will need to stay tuned to see what will become of the daily fantasy sports industry. However, for now you can still safely play on various daily fantasy sports websites as long as you do not reside in a state that prohibits it, which now includes Nevada.

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