DraftKings' partnership with the CFL looks like a deal with big upside for both

A key storyline ahead of the 2016 CFL season has been the league's growing number of significant partnerships, and one of the most intriguing new ones is with daily fantasy site DraftKings. Boston-based DraftKings has become a big part of sports in both Canada and the U.S. over the last few years, and the official partnership they announced with the CFL this week could be quite significant for both organizations. DraftKings' co-founder and chief revenue officer Matt Kalish and chief international officer Jeffrey Haas spoke to 55-Yard Line recently about the deal, and Kalish said it's one that has a lot of potential for both the league and the company.

"It's a mutually-beneficial arrangement," Kalish said. "The league, through a lot of different social platforms, will be talking about us, and they're the authority. We're providing exposure to our millions of users."

While DraftKings has a significant presence in Canada already, Haas said this is also about attracting DraftKings users outside of Canada to the league. He said those efforts will be particularly focused on the U.S. and the United Kingdom, where CFL games are respectively available on ESPN's family of television and digital channels and BT Sport.

"DraftKings has 7 million players," Haas said. "We're going to be doing everything we can to introduce them to our CFL content. Our goal is not just to engage existing fans, but to bring the CFL to new fans."

The DraftKings' executives believe there's a market there, as football is such a popular segment of the overall fantasy market and the CFL's the only big football league operating over the summer months. Kalish said adding the CFL provides an opportunity for football-focused DraftKings players before the NFL gets rolling.

"Guys who have played NFL football last drafted in January," he said. "It's a good opportunity to get them back in their comfort zone."

There's also a focus on bringing in CFL fans who aren't yet familiar with daily fantasy (which sees players draft teams each week rather than keep a team for a whole season), including significant numbers of free-to-play contests. There will be CFL game tickets and VIP experiences available as prizes in DraftKings' weekly CFL contents, too. For those who aren't yet daily fantasy experts, Kalish said there will be beginner-only leagues limited to users playing their first 50 games.

"We have a lot of really good beginner leagues that they can participate in," he said. "It's a good way just to get warm while you're learning."

Bringing existing CFL fans and new fans into daily fantasy could have big benefits for the league, too, as fantasy football in general has been a key factor in boosting the NFL's popularity. CFL fantasy football of any sort has only come along recently, but the efforts that have developed over the past few years (including official ones from the league and TSN and unofficial ones like Fantaseh) have helped the league, particularly in getting fans interested in games that don't involve the team they cheer for. Daily fantasy could be even a further boost on that front, both getting current CFL fans to watch more games and getting new fans to check out the league.

But what about the legality of daily fantasy in Canada? Well, it doesn't look like that's going to be a huge issue any time soon. DraftKings has faced regulatory controversies in the U.S. over whether daily fantasy is considered gambling, and its product's legality currently varies from state to state, but Haas said it's currently legal in all jurisdictions in Canada.

"Daily fantasy sports is a game of skill, and as such, is legal in Canada," he said.

That looks to be the case for the moment, as the Canadian government has shown very little interest in prohibiting or regulating daily fantasy. So, the CFL's partnership with DraftKings (and other Canadian partnerships they've formed, such as one with Maple Leaf Sports and Entertainment) should be just fine unless something major changes, and it looks like something that could bring a lot of value to both the business and the league. Kalish said the CFL's a big sport for many of their Canadian users already, and it has the potential to become a big sport for their U.S. and international users, so DraftKings plans to promote its CFL contests both domestically and internationally.

"It will be a very large focus in Canada, and I think it will be a large focus in other countries as well," he said. "Our goal is not to just engage existing fans, but to bring the CFL to new fans."

Update: This piece initially mentioned "opposition" from the Canadian Gaming Association. CGA president and CEO Bill Rutsey e-mailed to clarify "We are not opposed to DFS," but that the legal opinion they sought from a former general counsel for the Alcohol and Gaming Commission of Ontario suggests "because DFS is a combination of skill (picking your team) and chance (the outcome of a number of games) it is considered to be gambling under the Code, and as such, is illegal unless offered by a Canadian provincial government or its agency," concluding that "We certainly recognize that betting on sports is a huge business in Canada and around the world and that it heightens fan interest, enthusiasm and satisfaction, which is why we support the push to amend the Criminal Code to legalize single event wagering in Canada, including legal and regulated DFS." So, their stance is that daily fantasy involves chance rather than skill (contrary to DraftKings' position), which would make it gambling under current Canadian laws and would see it administered through provinces and their agencies rather than "unlicensed and unregulated" groups like DraftKings.