Daily Fantasy Sports Industry Voices Concerns Over Mass. AG’s Regulations Proposal

On January 12, 2016, the State of Massachusetts held a public hearing on proposed regulations for daily fantasy sports gambling (DFS). The DFS industry voiced many concerns.

In November 2015, Mass. Attorney General Maura Healey proposed consumer protection regulations. Rather than banning DFS altogether, the proposed regulations would seek to ensure transparency, truthful advertising, and the protection of the young. Such regulations would prohibit Massachusetts DFS players less than 21 years of age. The proposal also seeks to place a $1,000 monthly deposit limit on players, as well as to prohibit the extension of lines of credit.

At the January 12 hearing, the DFS industry voiced their intent to “work with” AG Healey. However, the industry does not agree with all of the regulation proposals. There are concerns that regulation could significantly affect DFS business operations. Peter Schoenke, Chairman of the Fantasy Sports Trade Association, stated the following at the hearing: “We believe fantasy sports and daily fantasy sports will continue to thrive in Massachusetts if you can continue to balance the important consumer protection issues that you have raised with the ability of our industry to continue to innovate with changing technologies, while at the same time limiting the impact on contests that so many residents of Massachusetts have played safely for years.”

DraftKings, Inc., a Boston-based DFS industry leader, took a stronger stance against the regulation proposals than did the FTSA. DraftKings public affairs director Griffin Finan said at the hearing that while DraftKings recognizes “the attorney general has an interest to protect consumers regardless of which DFS platform they use,” the company does “not believe state-sponsored regulation is necessary to achieve these goals . . . .” “[W]e believe that DraftKings currently provides its customers with many of the protections these regulations address . . .” continued Finan.

Despite the regulation proposals, the issue whether DFS is legal under current Massachusetts law is still debatable. In other words, should AG Healey’s proposed regulations be put in place, they may be regulating activity that is not legal under Massachusetts’ definition of unlawful gambling. The Massachusetts Gaming Commission highlighted this concern in a report released on January 11 — one day before the public hearing on Healey’s regulations. Accordingly, for DFS to be legal in Massachusetts, a legislative carve out may need to be created in the anti-gambling statutes.

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