Gaming regulators increasing scrutiny of daily fantasy sports
Photo | Flickr | Ajay Suresh
The Massachusetts State House
The Mass. Gaming Commission is beginning to survey where the dividing line is between daily fantasy sports and sports betting, its interim executive director said Tuesday, echoing steps taken in other states as legal betting changes the landscape for gaming regulators.
Daily fantasy sports (DFS) contests have been going on for years under the regulation of the attorney general's office, but the Gaming Commission took on some responsibility related to the fantasy contests when last year's sports wagering law applied a 15 percent tax on each DFS operator's adjusted gross fantasy wagering receipts for the first time and ordered the commission to collect it.
Interim Executive Director Todd Grossman told commissioners Tuesday that the commission's framework for DFS tax collections "is up and running," and said the commission is keeping an eye on another DFS-related matter "that is starting to take shape."
"Of late though, it's also been a great deal of activity surrounding the boundaries of sports wagering relative to daily fantasy sports, and whether there's actually some overlap between the two. That is to say whether there are certain activities that are offered by DFS operators that may be considered sports wagering activity," Grossman, who is also the commission's general counsel, said. "That's been addressed in a number of jurisdictions now and it's been discussed publicly. So I just wanted to note that we are certainly aware of this issue and we're in the process of reviewing it. And I will, of course, keep everyone apprised as to any thoughts we have, and it's certainly an issue that the commission may need to address directly itself."
At least two DFS platforms that operate in Massachusetts, PrizePicks and Underdog Sports, have attracted scrutiny from regulators in other states because their offerings might blur the line between fantasy sports and prop betting, according to media reports. Users of the sites win by correctly guessing whether a player's statistics end up higher or lower than a number set by the operator, similar to placing an "over/under" wager at a sportsbook.
New York regulators determined earlier this month that DFS contests "that have the effect of mimicking proposition betting ... is essentially sports betting," and gambling regulators in Wyoming have sent cease and desist letters to both companies, according to Legal Sports Report, an outlet that draws financial support from advertising agreements with gambling companies.
In its latest report on daily fantasy sports tax revenue, the Gaming Commission said in June that it had collected a cumulative $3.9 million from operators dating back to Aug. 10, 2022, when the wagering law that applied the tax was signed.
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