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Massachusetts 'Reviewing' Legality Of DFS Sites

Boston-Based DraftKings To Be The Focus Of Review

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The Bay State’s attorney general will be taking a look at the legality of the booming daily fantasy sports industry, according to a report Thursday from The Patriot-Ledger.

Attorney General Maura Healey reportedly is an opponent of the casino gambling coming to the state, and now will spend some time on scrutinizing Boston-based DraftKings, one of the leaders in the daily fantasy sports space. DraftKings received a $250 million investment from the likes of Disney earlier this year. Rival DFS operator FanDuel, which is based in New York, has Google and Comcast among its list of investors.

“This is a new industry,” Healey said of DFS, which is expected to become a $2.5 billion market by 2020, according to Eilers Research. “It’s something that we’re reviewing, and we’ll learn more about it.” Healey’s comments come as lawmakers discuss a bill that would allow the state lottery to offer fantasy sports and other skill-based games, such as poker.

It remains to be seen whether the state would go ahead with regulating online gaming before its brick-and-mortar casinos open, which is New York’s current timeline on online poker.

Fantasy sports for real money do have an exemption from federal law pertaining to online gambling, but that hasn’t stopped some individual states from looking at whether or not the activity is completely legal under their respective gambling statutes.

The Washington Post reported that thanks to the start of the NFL season, DraftKings has become America’s biggest TV advertiser. It has spent $20 million on more than 5,800 commercial airings in just a single week, according to iSpot.tv data.

Even though some are beginning to wonder whether DFS is gambling, it is not considered sports betting, so DFS doesn’t violate federal law that limits sports betting to just a few states, with Nevada being the only place with sports books. Delaware has limited sports betting. New Jersey is fighting for sports books and already has classified fantasy sports as a game of skill.

Still, one U.S. Congressman on Monday requested the House Energy and Commerce Committee to hold a hearing on the legality of fantasy sports. Fantasy sports are skill-based games.

Other states that have began reviewing the DFS industry are Nevada, Michigan, California and Florida. More than a dozen states have done so this year, with Kansas having arguably the most favorable results thanks to a bill being enacted that made fantasy sports legal.