Massachusetts sports betting regulators are officially setting their sites on Daily Fantasy Sports operators.
This action has been brewing for quite some time. Daily Fantasy Sports sites in the United States are facing increased scrutiny, across the entire country, over the past year or so. Officials argue, essentially, that these operators offer sports gambling services without the requisite sports betting licenses.
It was only a matter of time before this became an issue inside The Bay State. Regulators of sports betting in Massachusetts remain among the most meticulous and, by extension, action-prone, in the USA. They were never going to let this go unaddressed. Especially when so many other states have taken measures of their own.
What action will Massachusetts sports betting officials be taking against Daily Fantasy Sports operators? Is this the end of Daily Fantasy Sports in Massachusetts? Or just a roadblock for a more heavily regulated Daily Fantasy Sports Industry?
Massachusetts Sports Betting Regulators Planning to Send Cease and Desist Letters to Daily Fantasy Sports Sites
Mike Mazzeo of Legal Sports Report outlined the latest Massachusetts sports betting controversy:
“The Massachusetts Attorney General’s office is preparing to address daily fantasy sports companies operating in the Bay State via cease and desist letters, according to comments made last week in a state meeting. ‘I don’t intend to put the executives at PrizePicks in jail,’ Massachusetts first assistant AG Pat Moore told the state gaming commission last week. ‘We would like to explore civil enforcement in this area to see if it can be effective.’ The daily fantasy sports issue came up while Moore addressed the Massachusetts Gaming Commission for an Interdepartmental Service Agreement (ISA) budget for the upcoming fiscal year. ‘We are prepared to send a cease and desist letter to the daily fantasy sports operators,’ Moore said. ‘We think we have enough within the office to staff any litigation that comes out of that for an interim period.’”
For some, this issue appears cut and dry. If the folks in charge of regulating the Massachusetts sports betting industry believe sites such as PrizePicks are stepping over the line, there’s little the latter can do.
At the same time, DFS operators don’t appear as if they’ll accept punishment or banishment without a fight.
PrizePicks Responds to Massachusetts Gaming Commission
To that end, Mazzeo reached out to a spokesperson for PrizePicks, one of the most popular Daily Fantasy Sports sites in the USA. The company noted they have yet to receive a cease and desist letter.
But that’s not all, though. They also went on the offensive, essentially claiming that Massachusetts sports betting regulators are moving the goalposts when it comes to Daily Fantasy Sports compliance. As a PrizePicks spokesperson told Mazzeo:
“PrizePicks is registered in Massachusetts as a Fantasy Sports Operator and has been compliant with all fantasy regulations while also paying taxes in the state since 2022. We have not received a cease and desist letter from Massachusetts and have operated openly and cooperatively with the Commission to date. If in fact their longstanding position on fantasy sports has now changed, we will hear their reasoning for doing so and will defend our position accordingly. We’ve seen regulators in other states reconsider their change in positions when we have been able to correct misinformation spread by competitor lobbyists. We hope that is simply the case here.”
PrizePicks, and presumably other DFS operators, clearly appear open to negotiations or some type of dialogue. But Mazzeo’s report seems to imply that Massachusetts sports bettors are actually ready for litigation against DFS operators. Moore went as far as admitting the state will beef up their stock of litigators to help handle the issue.
Is This The End of Daily Fantasy Sports in Massachusetts?
It is much too early for us to sound a death knell for Daily Fantasy Sports wagering in Massachusetts. The Bay State, for all we know, could be open to adjusting the terms of DFS protocols.
Additional regulation has proven to be the answer elsewhere. Most recently, Florida proposed a Daily Fantasy Sports bill to help clarify and regulate overlap and violations. Alternatives and concessions, from both sides, can always be made.
And yet, this isn’t the case in every state. Daily Fantasy Sports operators have pulled out of other regions entirely upon facing scrutiny. We’re not just talking about small or fledgling markets, either. At this writing, Daily Fantasy Sports in New York as well as Daily Fantasy Sports in Florida are completely defunct.
If the Massachusetts Gaming Commission believes PrizePicks and others are operating like conventional online sportsbooks in the United States, it most likely won’t portend good news for Daily Fantasy Sports in The Bay State. State regulators tend to have all the leverage and power in these situations.
Sure, DFS operators can argue they have complied with state regulations. They can also point toward the DFS tax revenue they’ve generated. But this money is such a small piece of the total Massachusetts sports betting revenue that it’s unlikely to matter. If The Bay State legitimately believes that DFS sites are basically operating like unlicensed online sportsbooks, they will in turn force these companies out of the market. In fact, it wouldn’t surprise us if Daily Fantasy Sports betting in Massachusetts completely shuddered by this time next year.
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