The battle between Massachusetts sports betting regulators and daily fantasy sports sites is officially underway.
Amid a crackdown across the United States on “Pick ‘Em” gaming operators, officials announced plans last week to send cease and desist letters to DFS sites in Massachusetts. These instructions have now reportedly been sent. And they’re being received by 10 daily fantasy sports sites, including all of the biggest companies in the business, including Yahoo Sports.
This has become almost standard practice in recent months. States are singling out DFS operators for providing services that they believe mirror the business model of online sportsbooks in the United States. This essentially means USA sports betting regulators and state officials no longer consider daily fantasy sports games of skill—assuming they ever did. And this sentiment is not limited to regions without legalized sports wagering. States that have approved gambling are taking aim at the DFS business model, as well.
For The Bay State specifically, online sports betting in Massachusetts went live in March 2023. So this is not a decision that reflects anti-sports-gambling stances. It is instead yet another stand against the gray area in which DFS companies have long operated.
And yet, the action taken by the Massachusetts Attorney General’s office is even more significant for one big reason.
Though Daily Fantasy Isn’t Covered Under Massachusetts Sports Betting Law, They are Still Legal
It wasn’t totally clear whether these cease and desist letters would ever get sent. In most states, daily fantasy sites find cover in ambiguous legality. They aren’t specifically legal, but they’re not illegal, either. Many states do not have explicit language or laws that address fantasy sports.
The Bay State, however, was one of the few. And while daily fantasy sports is not covered under Massachusetts sports betting law, it does have a separate sector of compliance. Indeed, the daily fantasy site PrizePicks was hoping to renegotiate the terms of compliance for daily fantasy sports in Massachusetts when word first came that regulators were contemplating the cease and desist route.
Clearly, the willingness to adjust the terms has not made a difference. And the repercussions of this decision will be far-flung.
If nothing else, Massachusetts sports betting regulators are setting a precedent that daily fantasy operators are not immune to forced market exits anywhere—including in states that have DFS agreements and rules in place.
More Action Against Daily Fantasy Sports is on the Horizon in Massachusetts
Ten cease and desist letters have so far been sent to daily fantasy sports sites in Massachusetts. Though that covers most of the operators, there are still more letters or forms of action to come from the Massachusetts Gaming Commission. As Legal Sports Report’s Mike Mazzeo writes:
“This week, the Massachusetts Attorney General’s office issued letters to 10 daily fantasy sports operators for engaging in pick’em games, according to a spokesperson. PrizePicks and Underdog Fantasy were not among them, but it appears changes are in store for those companies as well. ‘In Massachusetts, we have laws on the books that demand safe and responsible conduct from gaming operators, and when those laws are ignored, my office will not hesitate to enforce them as a matter of public health and consumer protection,’ Massachusetts attorney general Andrea Joy Campbell said in a statement. ‘I want to thank the MGC for their partnership in prioritizing these matters.’”
It was not immediately clear why PrizePicks and Underdog Fantasy did not receive cease and desist letters along with everyone else. However, we have since learned that both sites spoke with Massachusetts sports betting regulators about amending their offerings.
“At the time of this letter, we are aware that two operators have voluntarily committed to cease their offers of such games in Massachusetts,” the cease and desist order read, per Mazzeo. The “operators” in this statement apparently refer to Underdog and PrizePicks.
As part of this agreement, massive changes are in store for both companies. Neither will be able to offer their traditional Pick ‘Em contests online. But PrizePicks will reportedly be allowed to offer these “peer competitions” on-site in select locations.
Which Daily Fantasy Sports Sites Were Actually Sent Cease and Desist Letters by Massachusetts Sports Betting Regulators?
With PrizePicks and Underdog Fantasy brokering exceptions, here’s the full list of daily fantasy sports operators in Massachusetts who will be expected to shudder their gaming offerings:
- BoomFantasy
- OwnersBox
- Parlay Play
- RealTime Fantasy Sports
- Sleeper
- Splash Sports
- Talid Sports, d/b/a Chalkboard Fantasy Sports
- Two Nine Sports, d/b/a StatHero
- Vivid Picks
- Yahoo! Daily Fantasy Sports
At this writing, it does not look like many, if any, of these daily fantasy sports sites will contest the letter. Granted, this could change. But any arguments to the contrary are a long shot.
Sports betting regulators across the United States are seemingly aligned in their stance against current DFS operations. They believe that these performance-based games on real-life athletes strips the “fantasy” out of “daily fantasy sports”. By that interpretation, this shoehorns the competitions offered by the above companies under the sports betting umbrella. And because these DFS operators do not have a Massachusetts sports betting license, the interpretation also renders what they’re doing illegal.
Once more: The circumstances are different in this case. Massachusetts has daily fantasy sports laws in place. But the latest actions do mean that they’ve determined DFS providers have violated these laws. And it’s tough to fight against it when so many other states are following the same script.
To this point, the end result of all this remains ambiguous. Could daily fantasy sports laws in the United States change forever? Will DFS become obsolete? Will DFS companies look to acquire general sports betting licenses?
Time will tell. For now, though, it’s certainly clear that daily fantasy sports in Massachusetts will never be the same.
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