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Massachusetts releases final regulations to legalize fantasy sports

Massachusetts Attorney General Maura Healey has set out final regulations to legalize daily fantasy sports (DFS) contests in the state, which must be implemented by operators no later than July 1st of this year.

Leading DFS operator DraftKings described the regulations as “tough”, while FanDuel said it had concerns that the regulations may “restrict the ability to introduce new pro-consumer innovations.”

The AG released the final regulations Friday, having issued draft consumer protection regulations last November. Massachusetts now becomes the third state, after Virginia and Indiana, to put DFS regulations in place.

The new rules, 940 CMR 34.00, are intended to protect Massachusetts consumers who play DFS contests for prizes from “unfair and deceptive acts and practices that may arise in the gaming process.”

It defines an operator as any enterprise that offers more than ten DFS contests per month through the internet or via a mobile app, with no games to be permitted on amateur, college, high school or student sporting events.

Players must be over the age of 21, and are not allowed to deposit more than $1,000 in any calendar month, unless specifically requested by the player and agreed by the operator. This procedure includes the evaluation of information, including income or asset information, sufficient to establish that the player can afford losses that might result from gameplay at the deposit limit level requested.

Advertisements must include information to promote responsible gaming, including information concerning assistance available to problem gamblers or directing customers to a “reputable source for such information.”

Operators are also prohibited from dissolving, merging or consolidating with another company, while there are unsatisfied obligations to DFS players. Employees or anyone affiliated with a DFS operator are not allowed to take part in any contests, although they can play in a private contest as long as that individual’s relevant affiliation has been fully disclosed to each player.

“We want to thank Attorney General Healey for her deliberate, comprehensive approach to ensuring the viability of fantasy sports in Massachusetts and protecting consumers in the state,” said FanDuel. “The Attorney General requested and carefully reviewed comments from the fantasy sports industry and consumer protection advocates over the past 60 days, and made sensible adjustments to several provisions, which will ultimately benefit consumers.”

The operator said however that although it shares the goal of protecting consumers, it had concerns that the regulations, in some instances, will restrict the ability to introduce new pro-consumer innovations.

“Nevertheless, we will work diligently to ensure we are in full compliance, and hope to see the regulations evolve over time to continue to allow further innovation,” continued FanDuel. “Again, the Attorney General took a thoughtful approach from the beginning, and we look forward to working with lawmakers across the country in a similar manner. We fully support sensible regulations to protect consumers and ensure sports fans nationwide can continue playing the games they love.”

DraftKings said that it appreciated the leadership of the Attorney General and her office and their willingness to have a meaningful dialogue about issues of importance to the industry.

“The regulations put forth today by Attorney General Healy are tough, but we will comply,” the company said. “We will continue to work with policymakers across the country to ensure that fantasy contests are fun and fair for the tens of millions of sports fans who enjoy playing them.”

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