With the battle to win over regulators now well and truly underway in the United States and Europe, Daily Fantasy Sports operators such as Malta-based Oulala Games are starting to turn their gaze towards Asia.
By Ben Blaschke
Asia, a continent of 48 countries each with their own distinct rules and regulations, represents the next great frontier for Daily Fantasy Sports, but also the next great challenge given the vast disparity in gambling laws from one jurisdiction to the next. The good news for DFS operators is that they’ve been through all of this before.
As recently as 16 months ago, the number of US States in which DFS was regulated numbered zero. Now there are 12 with another 10 debating the issue as we speak – a surprisingly rapid rate of progress given that DFS is unlike any other product in the online gaming sphere.
It is this framework that operators are looking at as DFS gradually spreads to other parts of the world and although gaining acceptance across Asia promises to be a far more exhaustive process, the long-term potential is huge.
“We are certain that Asia will be the next big market for DFS,” offers Valéry Bollier, CEO of Malta-based Fantasy Football operator and B2B provider Oulala Games.
“DFS should be able to do much more than just penetrate the Asian region. I believe that it will be a success because of its nature in being a skill game. Don’t forget that eSports is already big in Asia – DFS is simply responding to the needs of the new generation that is already playing eSports.”
Of course, exactly where, when and how DFS will gain approval from Asian regulators is the million-dollar question. Macau is a case in point. While in Asia’s gaming hub for G2E Asia in May, Bollier took the opportunity to meet with local regulators but admits “the legal evolution that we are hoping for will probably not happen short term and our whole industry needs to work together to convince legislators to keep up with the times and not chase after it after years have gone by.”
On a broader scale however, the challenge in any new jurisdiction is making regulators understand that not only is DFS a unique product in the online space – combining gambling with a considerable skill element – it should also be classified accordingly.
It is this skill factor that has been central to the DFS argument worldwide and although the response from legislators has varied wildly from state to state in the US and country to country in Europe, the industry celebrated a major breakthrough in March when the Malta Gaming Authority (MGA) issued the first ever Controlled Skill Games License to none other than Oulala.
“It meant we had successfully accomplished the goal we set four years ago – to be regulated separately from other iGaming activities,” explains Bollier.
“The MGA spent over two years developing this new licence category for skill games which specifically regulates DFS and defines it as a game of skill, disassociating it from gambling activities such as sports betting.
“The Maltese authorities were the first to forecast the potential of DFS in Europe and Malta’s body of regulation was the first to attend to our needs. We are proud to have participated in creating a licensing framework that would regulate skill-based games, including fantasy sports. This was a big step in the right direction and we are eagerly anticipating the moment that other European regulators and regulators elsewhere follow suit.
“This is also one of the current issues in Asia and in order for our sector to grow efficaciously there is the need for a structured legal frame – a need that has not yet been met.
“We need to protect the integrity of our ecosystem to ensure a healthy development. Asian legislators should take into account that even if DFS is a monetized game, its nature as a skill game means that it is, in its essence, closer to the video gaming industry than the iGaming one.
“It would help greatly if Asian legislators would follow the example that Malta has set.”
The appeal of DFS to the millennial generation is easy to understand. With a preference for games that not only provide an element of skill but also allow for social interaction, the opportunity for players to compile a team then see how it fares against a pool of other teams is the perfect fit.
But, as Bollier notes, the skill element can only flourish in a regulated and trustworthy environment.
“DFS is making a simple but strong promise to its customers,” he says. “When playing, you will be able to prove to your community that you know the sport better than they do. However, in order to do so our game needs to be a real skill game, not a game of luck. “That’s why it is crucial that legislators exercise caution during the selection process of operators and base their decision on the quality of their game and scoring system, while maintaining the accuracy of the DFS game as the feature of chief importance. It is in both the operators’ and the players’ interest that a proper legislative frame is put in place.”