Regulate DFS say Massachusetts regulators

The meteoric rise of daily fantasy sports, and its similarity to other forms of gambling, prompted Massachusetts regulators to come out in support of the vertical’s regulation Thursday.

Massachusetts Gaming Commissioner Enrique Zuniga told the Associated Press news agency: “There are enough similarities to other forms of gambling that it warrants regulation,” whilst Commissioner James McHugh commented: “You need to have somebody watching carefully when big sums of money are being transferred.”

The Massachusetts Gaming Commission is beginning public discussions on what direction the state should take regarding DFS, and the five-member regulatory panel discussed the issue Thursday, promising to quickly deliver a policy paper in order to guide members of the state legislature on the issue.

Chairman Stephen Crosby said that the industry needs to know what the “rules of the road” are, and that it was necessary for Massachusetts officials to move quickly on the issue.

Following the panel’s meeting, a spokesman for one of the market leaders, FanDuel, said that the company supports the concept of regulation, but warned that the imposition of casino gaming style restrictions could slow DFS development.

“This industry is not brick-and-mortar casinos. It’s conducted in a completely different manner,” the spokesman said. “To the extent that there is any risk, it’s not anywhere near as profound as in a casino or a traditional lottery.”

Jason Robins, CEO of the other market leader, DraftKings, said his company is committed to working with the commissioners and other authorities to ensure the DFS industry is operating transparently.

Regulatory staff have challenged the DFS industry’s contention that daily fantasy sports is exempt from the provisions of the UIGEA, observing in a memo to the commissioners that the variant did not even exist when the act was passed in 2006.

The 12-page memo notes that commissioners need specific legislative authority to regulate daily fantasy sports.

Associated Press observes that Massachusetts is one of at least nine states looking into regulating fantasy websites.