Massachusetts Releases Rules for Daily Fantasy Sports Operators

Last Friday, Attorney General of Massachusetts, Maura Healey, issued rules for daily fantasy sports operators, which she claims are the most comprehensive in the country

Healey proposed a set of regulations in November 2015; and the final version of the rules are largely the same; however, new additions, such as a ban on college and amateur sports have been added. Players have to also be more than 21 years of age to participate in any contests and individuals hoping to spend more than $1,000 in one single month would have to prove that they are able to withstand deep financial losses without detrimental consequences or adhere to the spending cap. The rules also state that if operators such as the Boston based DraftKings and the New York based FanDuel, wish to host “beginner” tournaments, they will have to gauge the experience of DFS players and ensure that expert players are prevented from participating in any of these competitions.

A different approach

The Massachusetts Attorney General decided to opt for a different approach to fantasy sports compared to counterparts in some other states. New York Attorney General, Eric Schneiderman has plunged into a legal warfare with the DFS giants FanDuel and DraftKings, arguing that the sites conduct illegal gambling activities and should pay penalties and refund New York players for any losses they have suffered on their sites; in a recent agreement DraftKings, Fanduel and Yahoo have also arranged to stop providing real money games in New York until and unless DFS gains legal status

Healey claims her regulations will create a “level, fair playing field” for participants; the rules will take effect from July 1. 2016 and do not require legislative approval. She expects daily fantasy sports companies to immediately begin moving toward compliance.

DraftKings said that they would “fully comply” with the new regulations. “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,” CEO Tim Dent said in a statement.

FanDuel were also pleased and thanked Healey for taking a “deliberate and comprehensive approach” to fantasy sports. The company mentioned in a statement that they would fully comply to the rules but were concerned that some regulations might restrict “new pro-consumer innovations.”

Painful details for DFS companies

While both the companies now seem happy with the rules, during a hearing in January, they objected to several provisions, especially the age restriction being at 21 years. Healey praised the DFS operators for their cooperation during the process but stuck by her age restriction cut off.

“Young people are very susceptible to addictive gaming, addictive play, and so it is all the more important that we take this action and make sure that play doesn't start until age 21,” she told reporters on Friday.

The age restriction also extends to anyone under the age of 21 taking part in fantasy sports while being physically present in the state of Massachusetts; for example, a 19 year old college student from another state, where it might be legal to play at a younger age, say 18, would still be barred from playing while in Massachusetts.

Operators failing to adhere to any of these rules could face civil penalties and even risk being shut down.

The Fantasy Sports Trade Association (FSTA), a Chicago based organisation that represents the fantasy sports industry in the USA and Canada, said that the Massachusetts regulations offer important consumer protections and provide a strong framework for other states to follow.

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