Massachusetts Becomes Third State To Regulate DFS
Bay State's Attorney General Issues New Rules On Games
The regulations were expected for quite some time from Massachusetts Attorney General Maura Healey, and they could help further the push for online poker. The purpose of the move to regulate DFS was to “protect Massachusetts consumers who play daily fantasy sports contests for prizes from unfair and deceptive acts and practices that may arise in the gaming process,” as well as players from “unaffordable losses.”
Players must be at least 21, and the DFS sites cannot hold contests on high school or collegiate sports. The new rules must be adopted by DFS sites by July 1.
Unlike Virginia and Indiana, the legislature in Massachusetts didn’t pass a bill for DFS. The Bay State instead went through the AG’s office to put some oversight on the industry. That difference means that Massachusetts, for now, won’t be taxing or getting licensing fees from DFS operators.
“We appreciate the leadership of the Attorney General and her office and their willingness to have a meaningful dialogue about issues of importance to our industry,” DraftKings said in a statement. “The regulations put forth today by Attorney General Healy are tough, but we will comply. We will continue to work with policymakers across the country to ensure that fantasy contests are fun and fair for the tens of millions of sports fans who enjoy playing them.”
FanDuel said in a statement: “We want to thank Attorney General Healey for her deliberate, comprehensive approach to ensuring the viability of fantasy sports in Massachusetts and protecting consumers in the state. The Attorney General requested and carefully reviewed comments from the fantasy sports industry and consumer protection advocates over the past 60 days, and made sensible adjustments to several provisions, which will ultimately benefit consumers. Although we share the goal of protecting consumers, we have concerns the regulations, in some instances, will restrict the ability to introduce new pro-consumer innovations. Nevertheless, we will work diligently to ensure we are in full compliance, and hope to see the regulations evolve over time to continue to allow further innovation."
While the moves by Virginia, Indiana and Massachusetts are good news for the DFS industry, all eyes are on New York as it works toward a DFS bill. Both DraftKings and FanDuel last week agreed to stop running contests for New Yorkers while Empire State lawmakers advance legislation. The settlement came after New York’s attorney general said last year that DFS is illegal.
New York, which has 19.75 million residents, represents nearly 13 percent of the active users for the DraftKings and New York-based FanDuel. DraftKings is headquartered in Boston. Another key state is California, which has a DFS bill on the table. The California Attorney General hasn’t yet decided if DFS is legal under current Golden State law, however.
Other states considering action on DFS include Mississippi and Maryland, the latter of which could go the route of having voters decide in November whether the games are OK.
According to Eilers Research, the DFS market could be as large as $2.5 billion by 2020.
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