StarsDraft, we hardly knew ye. Just a month and a half after Amaya Gaming launched its daily fantasy sports site, StarsDraft, in the United States, the company has announced that it is exiting the U.S. market almost entirely, remaining operational in just four states. StarsDraft players in Kansas, New Jersey, Maryland, and Massachusetts may continue to enter contests, but all other players are being asked to cash out.
In an e-mail sent to customers (unfortunately, this writer was one of those people who received said e-mail), StarsDraft said that the decision comes after “a review of recent daily fantasy sports developments within a number of jurisdictions.” The specific developments were not detailed, but they likely involve the recent pronouncement by the Nevada Gaming Control Board that DFS is gambling and thus operators must be licensed.
The GCB requested that all DFS sites stop allowing Nevadans to play, a request that StarsDraft and other sites like DraftKings and FanDuel honored. More than one state Attorney General, as well as the FBI and U.S. Department of Justice, are launching investigations into the legality of DFS and some politicians have also started calling for reviews of DFS.
The end of the e-mail takes a slight jab at the top two competitors in the DFS industry, DraftKings and FanDuel, referencing the recent data leak controversy that is arguably the number one reason the industry seems to be spiraling:
The recent incidents involving the practices of certain leading companies in DFS demonstrate that the current self-regulatory practices have fallen short.
We strongly believe that there is a real need for state regulation and licensing of DFS, and until such time, we will not be operating in any other states than the four mentioned above which already have existing and clearly defined daily fantasy sports guidance. We believe that this is the responsible approach for our company and encourage others in the industry to consider the same measures in order to ensure the future growth and viability of daily fantasy sports in the U.S.
Many in the DFS community have expressed their frustration with StarsDraft for this sudden decision, but reasonable people understand how to be disappointed in the development rather than mad at the company.
As one poster on Rotogrinders.com put it, “It’s simple. Online poker is, at this point, way more massive than daily fantasy sports internationally, and Amaya wants to be a ‘good actor’ in the overall gambling world to increase its odds of being licensed to provide online poker (and daily fantasy sports in the future, no doubt) as states legalize the game. PokerStars has made a big push in California recently, which could be the next online poker domino to fall in our favor next year.”
And that’s really it. Amaya has worked hard to finally get PokerStars licensed in New Jersey and is finally starting to change the opinions of those who feel that “bad actors” should not be granted entry into the U.S. market. Though DFS is not explicitly illegal in most states and is legal on the federal level, Amaya would rather play it safe, especially after the Nevada GCB ruling and the current legal investigations.
Things are up in the air for DFS in the short-term, so Amaya decided to protect the long-term interests of its DFS business, and perhaps more importantly its online poker business, by withdrawing voluntarily before it gets worse.
StarsDraft has ensured its customers that all funds are safe and can be withdrawn at any time. This writer has not initiated a cashout yet, but reports are that people have already received their funds. The site has removed all withdrawal restrictions to facilitate cashouts and has converted loyalty points most tickets to cash.