Massachusetts Daily Fantasy Sports Laws Take Affect in July
By Blake Yagman
For the past year and a half, Daily Fantasy Sports sites FanDuel and DraftKings have fought for their survival in Massachusetts.
Ahh, Daily Fantasy Sports. DraftKings burst onto the scene in Boston last year after commercials showed users (in poorly disguised New England Patriots retro AFC-red uniforms) winning millions of dollars after submitting minimal entry fees. For a few months, “daily fantasy sports” (or ‘DFS’) sites such as FanDuel and DraftKings added between 20,000-30,000 new users per month— that is, until the ‘DFS’ websites were exposed as having less to do with skill than chance and beating insanely high house odds.
Since then, an existential war for the survival of daily fantasy sports has raged from sea to shining sea. According to ESPN’s Ryan Rodenberg, over 75 lobbyists are dispersed by the DFS industry to more than 30 states. Currently, DFS is banned in only five states, but many states consider DFS to be illegal under their existing gambling laws (as opposed to an explicit ban). In some states (like New York), FanDuel and DraftKings have stopped accepting or soliciting contest entries from potential consumers all together. A few states (like Washington) have even proposed harsh bans, instituting up to a five year prison sentence for advertising any business associated with DFS.
The question remains: are daily fantasy sports to be considered gambling or merely a game of skill? Each state’s policy on DFS is predicated around how each state has interpreted this question.
In Massachusetts, Bostonians (for a time) were inundated with FanDuel and DraftKings advertisements at every professional sporting event and in every sports broadcast. Although some of Boston’s teams have strayed away from DFS advertisements, the damage was already done; the prominence of Boston’s teams amongst citizens of Massachusetts lead to a spike to DFS users from the state (as compared to other states).
On November 15, 2015, Massachusetts Attorney General Maura Healy addressed the existence of DFS in Massachusetts. She stated, “I think anybody looking at this acknowledges it’s a form of gambling. Just because it’s gambling doesn’t make it illegal.”
Healy’s comments were contrary to the actions taken by similar states, such as New York. In New York, Attorney General Eric Schneiderman actively investigated DFS; this lead to New York completely banning DFS in the state, and FanDuel withdrawing it’s domicile from the state.
Healy’s openness to working with FanDuel and DraftKings will be codified into law on July 1st, as DFS will work within a legal framework to allow play in Massachusetts. This is extremely significant for the survival of DFS, as many major states have ensured that these sites will not prosper within their borders.
The new legality of DFS in Massachusetts comes with new (but manageable) regulations. First, the rules ban any users under the age of 21. Next, no fantasy contests can allow for competitions based off of the efforts of high school, collegiate, or amateur athletics. Finally, DFS operating sites have to separate their operating expenses from the intake of player funds. Non-compliance with any of these statutes could result in fines or a request to cease operations in the state.
Oh, and don’t worry… Current fantasy sports, such as Yahoo! And ESPN will be unaffected by the new regulatory scheme.
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