Steve Ruddock Amaya DFS PokerStars California

Amaya Gaming’s purchase of DFS site Victiv and the subsequent announcement that the company will be launching a new Daily Fantasy Sports website (Amaya is rebranding Victiv as StarsDraft) is going to have far-reaching ramifications beyond DFS.

The acquisition could shake things up throughout the iGaming world.

First, Amaya’s arrival flips the “DFS is not gambling” argument completely on its head. Amaya, the very definition of a gambling company, makes it increasingly difficult for companies like DraftKings and FanDuel to continue to claim that DFS is something altogether different from sports betting or other forms of traditional gambling.

Second, Amaya will be joining an increasingly crowded and competitive market, and will have to fight for market share. It will have to contend with the brand power of Yahoo, as well as the free-spending DraftKings and FanDuel, which currently control more than 95 percent of the DFS market.

But lost in the shuffle is the potential impact on Amaya’s efforts to break into other legal gaming markets in the United States.

For instance, Amaya’s entrance into the DFS space has the potential to change things in California, where the company is trying to smooth the way for its subsidiary PokerStars to apply for a license.

Help or hurt PokerStars in California?

With Amaya on the verge of offering Daily Fantasy Sports in over 40 states (including California), it will become increasingly difficult for PokerStars’ naysayers to continue to accuse the company – and by extension its parent company Amaya Gaming – of being a so-called bad actor, and unsuitable for a California online poker license.

If Amaya Gaming is capable of legally offering real-money DFS contests to Californians, it significantly weakens the claims being made by Pechanga and its allies that PokerStars is a company of “Internet scam artists and con men.”

This should make it far more difficult for the anti-PokerStars faction to continue to push the legislature to prohibit PokerStars from even applying for a license in California.

This argument loses even more credibility when you consider the DFS industry is essentially self-regulated, whereas PokerStars would have state regulators looking over its shoulder if it were licensed to operate an online poker site in California, providing yet another layer of consumer protection.

Amaya investigation

In its attack ads directed at PokerStars, the Viejas Tribe wasn’t just linking Amaya Gaming to its new asset PokerStars in an abstract way. The tribe went after Amaya itself, highlighting the ongoing investigation into potential insider trading during the lead up of the sale of PokerStars to Amaya.

This line of attack was repeated by several other tribal chairs at an online poker hearing on June 24, 2015, where tribes stealthily mischaracterized the investigation to paint Amaya in a very negative light.

The problem is, this line of attack is a red herring.

Nobody, including Amaya executives, has been brought up on charges, let alone convicted of insider trading, and multi-billion dollar reverse acquisitions are likely to be investigated.

Tribes have used this argument in the past

As noted above, all of the current arguments against PokerStars being allowed into the California online poker market seem to become moot if Amaya is able to legally offer DFS contests in California and beyond.

Making the case that Amaya is unsuitable to offer online poker to Californians while the company is accepting DFS wagers from those same residents is a tough case to make, even for the most accomplished spin zone experts.

The objections of Pechanga and its allies become even more tenuous if Amaya and PokerStars are granted an interactive gaming license in New Jersey, and PokerStars launches an online poker site in that state.

If PokerStars is licensed in New Jersey the question becomes: Why can they offer online poker there but not here?

However, it should be noted that California tribes have been using a similar argument for decades against card rooms (card rooms can offer poker and player-banked games, but not house-banked games) and it’s the same argument they are making against the horseracing industry’s desire to be part of the online poker industry in the state.

It’s ok for you to offer this form of gambling, but not that one is a common line of defense by California’s gaming tribes. The only difference this time is they would be arguing against a company on ethical grounds rather than against an expansion of gambling.

Upshot

While it may seem like a win for PokerStars, Amaya’s foray into the DFS industry will likely have little impact on how Pechanga and its allies frame the debate.

It certainly weakens their objections, but the question is, does it change the minds of legislators?

Steve Ruddock
Steve Ruddock - Steve is one of the most recognizable names in the online poker media space. He brings his deep knowledge and equally deep well of opinions to his coverage at CaliforniaOnlinePoker.com.