Fantasy sports industry confident despite shutdown orders
Courtesy Draft Kings
Boston-based Draft Kings is among the online fantasy sports gambling sites that could be impacted by an upcoming decision by Maura Healey.
As players wait for Attorney General Maura Healey to unveil her final regulations for the daily fantasy sports world, industry executives say action in other states has given them confidence that their business is here to stay.
Citing "a lot of positive momentum out there," Peter Schoenke, chairman of the Fantasy Sports Trade Association, said the sense in the industry is that many states will move to clear up the legality of the relatively new form of sports wagering rather than outlaw it.
"We're seeing a lot of progress and momentum at the state level, so we're pretty optimistic states will pass a law to clarify that the industry is legal in the state and implement consumer protections," he said. "Local legislators are realizing this is a popular hobby and their citizens want to continue to play, so they've gotten behind it in most states in the country."
Though daily fantasy sports (DFS) operators -- like FanDuel and Boston-based DraftKings -- are facing shutdown orders in some states, the industry has mounted a lobbying effort elsewhere to shape the playing field in a way that's acceptable to lawmakers, operators and players.
"The regulatory effort at the state level has actually been doing pretty well so far this year, we're encouraged by our momentum," Schoenke said. "So far, 27 states have some form of fantasy sports or DFS legislation they're contemplating or debating in the State House. Consumer protection regulations are in almost all of them."
Since DFS erupted into the public consciousness at the beginning of the last NFL football season, legislative leaders in Massachusetts have expressed interest in regulating and possibly taxing fantasy sports wagering, but so far no lawmaker has filed legislation to address the topic, which could reopen the expanded gaming debate.
Instead, the bulk of the attention paid to DFS in Massachusetts has been by Healey. Almost two months ago, her office held a public hearing on her proposed consumer protection regulations for the industry, which include a ban on players younger than 21, a prohibition on DFS contests based on college or amateur athletics, and a monthly deposit limit of $1,000 for DFS players.
"We have consistently been responsive to the attorney general's proposed regulations and intend to comply with the final framework," Grffin Finan, director of public affairs for DraftKings, said in a statement. "DraftKings is always supportive of thoughtful and appropriate consumer protections. That is why we are actively engaged with state legislatures across the country to put in place a regulatory framework that works for consumers and allows us to continue to provide our fans with the games they've come to love."
And as the DFS industry lobbies state lawmakers around the country, Schoenke said he's seen evidence that other states are starting to follow Healey's lead and impose consumer protection regulations rather than ban DFS.
"Some elements of the Massachusetts proposed regulations have shown up in a number of debates," Schoenke said. "No one is directly copying Massachusetts as far as doing the exact same thing, but a number of states are looking to see what Massachusetts did and (are) interested in reacting to it."
Healey's regulations are not yet enacted. Her office said Thursday it is still in the process of finalizing the regulations and hopes to have them done "soon."
Regardless of Healey's actions, there are some who believe her regulations will not be sufficient, no matter how thorough or stringent.
In January, the Massachusetts Gaming Commission issued a white paper on fantasy sports and declared there is "some urgency" for the Legislature to weigh in on the legality and regulation of a form of sports wagering that has taken off in recent months with a major advertising push.
"Right now, it appears to us that the law concerning DFS is at best unsettled, and that there is a possibility that DFS could be considered illegal, even though the Attorney General has seen fit to move directly to the issues that really matter," Gaming Commission Chairman Stephen Crosby wrote in an introduction of the paper.
Crosby continued, "Until this legal uncertainty is resolved -- which can only be done by the Legislature -- the citizens of Massachusetts, DFS players, and DFS companies alike (including one of the leaders, DraftKings, which is located in Boston), will find their activities risky, and the DFS future utterly uncertain."
But still there has been little interest on Beacon Hill to deal with the DFS world through legislation.
Rep. Joseph Wagner, the House chairman of the Committee on Economic Development and Emerging Technologies and one of the legislators who drafted the 2011 casino law, told the News Service in January that lawmakers are in no rush to bring a DFS bill to the floor.
"I don't think we can look at it and say, 'we should do it,' unless we know everything about what it is we propose that we might legislate or regulate," he said. "The last thing you want to do is run and jump and not know what you're jumping into."
So as the DFS world faces something of an uncertain future in Massachusetts and elsewhere, Schoenke said players and the industry have not been substantially harmed by the intense scrutiny of the last six or eight months.
"Even though a lot of the headlines over the last couple months have been negative about the industry, the industry itself seems to be doing quite well," the trade association chairman said. "I think when you talk to individual companies, their core businesses are doing well, so individual operators in this space might have a different story, but overall I think fantasy is still doing really well."
He added, "daily obviously has some problems and some issues, but I think long-term there is still a bullish outlook for it."
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