[toc]The daily fantasy sports industry was generally in favor of the settlement concept proposed by Massachusetts Attorney General Maura Healey when she wrote them in November from last year.
But it was also clear that they did not support every last Healey settlement floated, and contested with a lot of them. It was clear on the day they were released, when DraftKings said “We have some concerns about the draft regulation. “
Industry representatives expressed these concerns during a public hearing earlier this month, then put those concerns in writing – along with the concrete changes they want to see – in public comments sent to the GA office. (The deadline for providing public comment ended last week.)
What have we learned from industry thinking about regulation? They have real issues with a lot of them, and DraftKings and FanDuel wouldn’t be very happy if they were implemented as is.
Issues Identified by DraftKings, FanDuel, FSTA
A plethora of public comments have reached the deadline, including from the Fantasy Sports Trade Association and the DFS duopoly of DraftKings and FanDuel.
All comments submitted can be viewed here. Here is a sample of the biggest issues identified by the industry:
18, not 21
Currently, DFS contests are limited to players 18 years of age and older. Massachusetts regulations would make the minimum age to play 21 years old.
Unsurprisingly, the fantasy industry would rather not see this regulation go into effect.
DraftKings on the subject:
Massachusetts laws are replete with references that an 18-year-old is treated like any other adult in the Commonwealth. … There does not appear to be a rational basis related to protection against unfair and deceptive marketing practices to prevent young adults between the ages of 18 and 20 from participating in daily fantasy sports competitions, especially where the proposed regulatory framework provides for protections for all other adult consumers.
And DraftDay highlights comps for DFS where 18-year-olds are allowed to play:
This age is the minimum age required for customers to engage in lottery, mutual betting and charity games, including bingo and drawbars, in Massachusetts.
Finally the FSTA:
At 18, you’re old enough to vote in this country and make adult decisions. Additionally, an age limit of 21 appears to be linked to gambling products and casinos where age of alcohol consumption is a major factor in participation. Fantasy sports are not necessarily played in a physical location, so a similar age limit related to drinking laws should not apply.
Massachusetts Gaming Commission Chairman Stephen Crosby agree with the operators on this point.
The regulations suggest that DFS operators cannot offer contests based on university games – something that DraftKings, FanDuel and some other operators offer. This is obviously related, in part, to the idea that many college players are in the 18-21 range, alluding to the previous settlement.
But it’s also related to the idea that competitions should only be based on professional athletes, not amateurs. Hardly anyone in the industry is a fan of this proposition.
Aside from the fact that the competitions involve collegiate sports, collegiate sports competitions are no different from other competitions permitted by the proposed regulations. There is no apparent unfair or deceptive trade practice to prohibit certain contests having the same characteristics as permitted contests.
Finally, the FSTA also believes that fantasy sports should be allowed for college sports. NCAA football and basketball have been a part of fantasy sports for almost as long as the hobby has been around. … Even with the rising prices around fantasy varsity sports games, we believe this will not change since fantasy sports do not have the same integrity issues as sports gambling.
Interestingly, FanDuel did not raise any issues with this settlement.
Some in the industry believe that language script in the regulations is too broad. According to the rules, a script is defined as “a list of commands that a computer program related to DFS can execute that are created by DFS drives (or by third parties for the use of DFS drives) to automate them. process on a DFS competition platform. “Then, the limitations on the scripts that would be instituted:
No script will be allowed. Existing scripts will be deleted. A DFSO will prohibit any person or company using unauthorized script from participating in a DFS contest by terminating that individual or corporate account and banning that person or company from DFS contest platforms.
The language, argues the FSTA, is not specific enough:
There are many research tools and team management programs that help all fantastic sports players and are used in non-DFS competitions that might fall under this ban. … The broad wording “Automate processes” in the definition of “Script” could end much of this activity, which does not appear to be the intentions of the proposed regulation.
DraftKings does not mention a script in its letter, despite the fact that the site comes from has deployed its own scripts for all players.
Many have disputed this language, which simply says that DFS operators “will not allow simultaneous logins on a single account.”
Sounds good in practice, but gamers will often be connected via computer and mobile device, as DraftKings pointed out:
Often these consumers do not log out of the DraftKings smartphone app before logging into the DraftKings website through their laptop. This modern technology is the way people interact with the Internet.
Definition of highly experienced player
Almost everyone seems to have a problem with this. As written in the regulations as written, a very experienced player is defined as:
Any DFS player who has 1) entered more than 1,000 competitions offered by a single DFSO; or 2) has participated in more than 250 competitions offered by a single DFSO and has won more than 65% of the total number of such competitions; or 3) has won more than three DFS Contest prizes valued at $ 1,000 or more. Once a DFS player is classified as a highly experienced player, a player will remain classified as such.
DraftKings wants the definition to be changed to:
Any DFS player who has participated in more than 500 competitions offered by a single DFSO will be classified as a highly experienced player.
FanDuel agreed with the idea of a simplified definition:
These challenges can be considerably alleviated, however, by basing the definition solely on the number of competitions entered – for example 500 or 1000 – rather than on other criteria.
The regulations currently create a limit of $ 1,000 of deposits per month for users, a figure that would likely hamper the ability of DFS sites to generate cash.
The deposit limit of $ 1,000 per month is arbitrary and unnecessarily low. Under this proposed regulation, the information that consumers must provide to increase the deposit limit, “information, including income or asset information, sufficient to establish that the DFS consumer can afford the losses that could result ”, are invasive for consumers and burdensome for covered entities. Instead, DraftKings proposes that the proposed settlement adopt DraftKings’ standard deposit limit of $ 6,000 per month.
Imposing this limit forces the DFSOs to act essentially as credit reporting agencies to assess whether to allow players to make a deposit above the threshold in a way that no other merchant in the world. Massachusetts is not required to do so.
What happens next?
The Time range of what will happen with the regulations is unknown. However, it’s fair to assume that the AG will take some time to review public comments and fine-tune the regulations, a process that could can take weeks or months.
However, the GA also expressed interest in having the regulations in place. as soon as possible, so that consumer protections are in place for DFS users. Whatever happens, it will probably be accelerated.
Will the industry be successful in solving the problems? Obviously, many of their arguments have merit; the restriction on players who must be 21 years old, in particular, seems to have collected a lot of repel. And the GA seems determined to codify common sense regulations.
Right now, the industry is waiting for Healey’s next move; of course, they – or at least DraftKings and FanDuel – may be aware of this decision, as they have been in close contact with the GA during this process. At the same time, however, it is clear that DFS operators have been a bit surprised by many of the regulations proposed by Healey.
The timeline of Massachusetts so far
Massachusetts, with New York, California and Illinois, has been a hotbed for the DFS industry. Government interest in the industry predates the October data leak at DraftKings, as DK asked Healey to examine the legality of DFS. Since?
All the while the state lottery eyeing the DFS industry as a revenue generator, and there has been a lot of gossip from the legislature – but no legislation.