MA Attorney General Maura Healey Thursday morning proposed a series of new rules for daily fantasy sports in the state that would ban players younger than 21, limit the ability of sophisticated “sharks” to dominate contests for cash, and force daily fantasy companies to change their advertising practices.
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“Daily fantasy sports sites may not even exist next year”.
“We also welcome the opportunity to work with attorney generals in all states, along with other lawmakers, to implement fair regulations that benefit both consumers and sports tech innovators”.
DFS sites such as DraftKings and FanDuel, two multi-billion dollar businesses, snuck through the cracks of legislation because fantasy sports has never been seen as gambling and local casinos don’t offer daily fantasy sports games. But in my opinion, that issue has been settled by the NCAA, as the association forbids college athletes from engaging in sports fantasy leagues under the threat of losing a year of college eligibility.
While not taking quite the drastic steps of NY, MA has introduced new state guidelines that would enforce more stringent rules on daily fantasy sports.
In September, DraftKings and FanDuel spent $118 million on TV ads combined, putting them right behind AT&T’s (NYSE:T) $129.2 million, says Michael Nathanson, an analyst at MoffettNathanson, in a blog available to clients.
Daily fantasy advertising must make greater disclosures as far as likelihood of winning and the average win, holding more strictly to a “truth in advertising” standard. We will utilize the next 60 days to share our comments in the hopes of effecting a few changes and are firmly committed to continuing to operate in a lawful and transparent manner. Playing or endorsing daily fantasy games, the Tour says, would be considered “conduct unbecoming a professional”, the Tour’s catch-all term for “behavior it doesn’t like”.
“What we want is these companies to do the things necessary to protect players while letting them enjoy the sites, prevent underage players from playing and protect the money when the money is deposited into the escrow account”, he said.
The FBI and Department of Justice have also launched an investigation into the legality of daily fantasy contests. “These are games you carry around with you in your pocket and lose money at the touch of a button”. That is what bookies do, and it is illegal in NY. “Violation of any of these regulations will be actionable under our state consumer protection laws”.
DraftKings, which is battling an effort by the NY attorney general to shut down their operations, said in a statement that Healey has taken a “thoughtful and comprehensive approach”.
The suit came as Massachusetts’ attorney general added tighter restrictions in her state.
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The new series of regulations will be filed today (Friday), with an open comment period running through to January 22.
