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    How the DOJ Forced an Online Poker Savant Into Fantasy Sports

    By Sam Laird | Mashable – Tue, Jan 17, 2012

    Taylor Caby turned $35 into "a couple million" playing online poker while still a college student in the early 2000s.

    He soon leveraged his success as a player into founding a pair of successful poker-related Internet companies, CardRunners.com and Hold'em Manager. The future looked wide open until a Department of Justice (DOJ) crackdown last April dealt a massive blow to the to the industry, severely wounding Caby's companies.

    [More from Mashable: 9 Tech Millionaires Under Age 30 [INFOGRAPHIC]]

    In April, federal prosecutors charged the owners of three major online card rooms operating in the United States with fraud, effectively shutting them down and paralyzing the industry as a whole. After years of Internet poker operating in a legal gray area, the DOJ said that the companies were in violation of the 2006 Unlawful Internet Gambling Enforcement Act. Recent events have given some hope for a rebirth of Internet poker, but for now it remains largely crippled in the United States.

    "It killed our business by 40% overnight," Caby told Mashable. "It's made it next to impossible to play online poker in the United States."

    [More from Mashable: Why Companies Need to Iterate Based on User Feedback]

    But Caby said that he's found deliverance from the DOJ-wrought destruction in another corner of the Internet gambling realm -- fantasy sports.

    Caby believes that his experiences in the Internet poker world will help him with his new venture -- DraftDay.com, a daily fantasy sports site that aims to make the all-consuming virtual game more accessible to audiences beyond die-hard sports fans.

    The site benefitted from serendipitous timing. Caby and his three co-founders began planning it in late 2010 as a side project. Then the DOJ action the next spring transformed it into an instant priority.

    Most fantasy sports leagues last for several months. Many fans lose interest. But by narrowing the contests down to just one day, Caby thinks that users will be more willing to bet real money and maintain their attention spans.

    "We're not going for the people who already spend hours on fantasy sports," he said. "We want to get the people who are more casual sports fans and just looking to have fun."

    Launched in September, DraftDay is one of a growing number of daily fantasy sports sites including FanDuel.com and 365FantasySports.com. But few have gained mainstream traction and the space is still very much an emerging market.

    The 2006 act that became the downfall of online poker gives fantasy sports a pass, considering them a pursuit based more on skill and knowledge.

    DraftDay currently has some 10,000 users, Caby said, with about a quarter of them regular players. Games range in size from just a few players to more than a thousand, and can feature four-figure payouts or be free to play. When a user buys in to a game, DraftDay gets a cut between five and 10 percent.

    Users can currently draft teams of NFL, NBA or NHL players for nightly or weekly contests, and Caby said that options built around golf and college sports will be available soon. A mobile app for iOS and Android is planned to launch within the next month.

    Caby called this an "exciting" time for DraftDay, but one also tinged with regret over a tumultuous past year.

    "I really wish the poker crackdown hadn't happened," he said. "But I think, in the end, it's given DraftDay a chance to be really successful."

    What do you think of the daily fantasy sports premise? How legal or illegal should online gambling be? Let us know in the comments.

    This story originally published on Mashable here.

     

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