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Massachusetts Attorney General Proposes Daily Fantasy Sports Regulations

Thursday November 19,2015 : MASSACHUSETTS AG PROPOSES DFS REGULATIONS

Filed with the Secretary of State’s office Friday.

Massachusetts State Attorney General, Maura Healey, has proposed comprehensive “first-of-their-kind” consumer protection regulations for the new and rapidly evolving daily fantasy sports (DFS) industry which will be filed with the Secretary of State’s office Friday.

The draft regulations set forth a number of requirements for all DFS operators with players in Massachusetts to adhere to in order stay in compliance with state consumer protection laws and were drafted following numerous consultations with daily fantasy sports companies and other interested parties.

Regulations proposed include:

-    21 and over age limit.

-    No promotion or advertising at schools or on college campuses.

-    No advertising or promotional activities at amateur, school or college sporting venues.

-    No contests based on the performance of college or high school athletes.

-    Advertisements cannot portray minors or market endorsements from colleges or college athletes.

-    Professional athletes, agents, employees or others connected to a particular sport will not be allowed to enter DFS contests in their sport.

-    Company employees and others with access to insider information will not be allowed to participate in DFS contests.

-     Less than 2% of all players win 90% of all prizes. These professional and other highly-experienced players will be easily identifiable to other players.
-    Games limited to beginners will exclude experienced players from participating.

-    Advertisements must include information on available assistance to problem gamblers or direct consumers to a reputable source.

-    Advertisements mentioning average individual winnings must also disclose average net winnings of all players.

-    Deposits limited to no more than $1,000 each month, unless the DFS operator obtains verification from the player that establishes the player’s ability to sustain losses at a higher limit.

-    Operators must provide options for players to exclude themselves from all contests, set self-imposed deposit or loss limits, or limit the amount of contest entered per week.

-    DFS companies cannot extend credit to players.

The draft regulations also detail entry limits, reinforce the obligation to comply with tax laws and to disclose tax liabilities for players, provide protection from unauthorised withdrawals, and layout a complaint procedure for consumers.

Violations of any of these regulations will be actionable under the state’s consumer protection laws.

"These regulations are a first of their kind for the daily fantasy sports industry, and they focus on protecting minors, ensuring truthful advertising, bringing more transparency to the industry, and leveling the playing field for all consumers," AG Healey said. "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."

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