Massachusetts Proposes New Regulations For DraftKings, FanDuel

draftkingsWhile New York and Nevada have joined the ranks of states barring residents from playing daily fantasy sports sites DraftKings and Fan Duel, DraftKings’ home state of Massachusetts is demonstrating more flexibility, proposing new regulations that would still allow the sites to operate in the state.

Massachusetts Attorney General Maura Healey today announced a slate of new rules intended to keep minors from playing, restrict employees from taking part in daily fantasy contests, increasing transparency in advertising, and capping monthly spending.

Under the new rules, Massachusetts residents must be at least 21 to enter a DFS contest. Daily fantasy sites would be blocked from advertising or holding promotional events at schools or on college campuses, and their ads wouldn’t be allowed to include minors.

The AG proposes blocking any pro athlete (or any employee at a pro sports team) from entering a DFS contest in their particular sport, along with a ban on employees of DFS sites from entering these contests.

You may remember that much of the current scrutiny of daily fantasy sites began after a mid-level DraftKings employee won $350,000 in a single FanDuel contest. Both companies denied any wrongdoing, but subsequently barred employees from entering these tournaments.

With 90% of winnings going to fewer than 2% of DFS players, the AG is seeking to require that fantasy sites label these pro DFS winners accordingly. These high-level players, some of whom admit to targeting novices for easy wins, would be barred from entering beginner-level tournaments.

While current ads for DFS sites tout the huge amounts of money that could be won in a tournament, the average winnings are often hidden in fine print, if mentioned at all. The proposed Massachusetts rules would require that this information be clearly disclosed in ads, along with information about assistance for people with gambling addictions.

In an effort to prevent people from risking too much money, DFS deposits would be capped at $1,000 per month. Exceptions could be made if the site can verify that the player is financially able to cover larger losses.

“This is a first step, but an important step, as we continue to evaluate this new industry and make sure our laws keep up with these evolving technologies,” said AG Healey in a statement.

In an e-mail to Consumerist, DraftKings describes the rules as a “thoughtful and comprehensive approach” to regulating DFS.

“While we do have some concerns with the draft regulations, we intend to work closely with the Attorney General’s office to ensure we are operating in the best interest of our customers,” reads the statement. “We will utilize the next 60 days to share our comments in the hopes of effecting some changes and are firmly committed to continuing to operate in a lawful and transparent manner. We will immediately begin taking steps to prepare to implement the changes to our product that the Attorney General requires.”

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