Fantasy Sports Legalization Passes Massachusetts State House

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[toc]Massachusetts General Court passed a bill on Sunday evening that would officially legalize the daily fantastic sports industry.

The effort came from almost nowhere in the Commonwealth Legislature, which had not seriously considered legislation dealing with fantasy sports to date.

The bill has yet to be signed by Governor Charlie Baker.

This is another victory in the home state of DraftKings for the DFS industry.

How has DFS been successful?

Provisions for fantastic sports have been included in a economic development packageH4569. The legislator hastened to adopt measures on the last day in which it could do so for the current session.

The package was passed unanimously late at night at lodge and with a single “no” to Senate.

At the beginning of July, the state house was consider a commission to deepen the study of fantastic sports within the framework of the economic program. But at some point in the process, that package was changed to legalize paid entry fantasy sports competitions.

Bills that have been passed so far in the United States have reached the finish line as stand-alone articles. This is the first time that DFS legalization has been adopted as part of a much larger package.

What’s in the Massachusetts DFS bill?

The bill, unlike others that were passed in 2016, does not regulate DFS. It also does not seek to tax or charge license fees to operators.

It does two things:

Legalize DFS

The most important part of the bill is the language of legalization, which acts in tandem with the regulations put into effect by Attorney General Maura Healey earlier this year. Healey had considered that DFS was legal under state law at the end of 2015.

The bill allows any operator of fantastic sports to offer contests with cash prizes, legally, through July 31, 2018, as long as it is “in accordance with regulations promulgated by the Attorney General”.

It also excludes fantasy sports from the definition of gambling in the State (“… A fantasy contest should not be considered illegal gambling.”) It also defines “fantasy contest” much as it is discussed in the Internet Illegal Gambling Law Enforcement Act.

The “fantasy contest” includes any fantasy or simulated game or contest, in which:

  • (i) the value of all prizes and rewards offered to winning entrants is established and made known to entrants prior to the Contest;
  • (ii) all winning results reflect the relative knowledge and skills of the participants and will be determined primarily by the cumulative statistical results of the performance of individuals, including athletes in the case of sporting events; and
  • (iii) no winning result is based on the score, point spread or any performance or performance of a single actual team or a combination of such teams or solely on a single performance of an athlete or d ‘an individual player in a single real event.

Create a fantastic sports commission

The bill creates a special commission to conduct a study on fantastic sports and online game. What will he watch?

The commission examines all aspects of online gaming, fantasy sports games and daily fantasy sports including, but not limited to: economic development, consumer protection, taxation, legal and regulatory structures, the implications for existing games, charges and benefits to the Commonwealth and any other factors the commission deems relevant.

The language of the commission appears to be inspired by the Massachusetts Gaming Commission, suggesting a “Omnibus approach” for dealing with online gambling.

An earlier version of the larger economy package included language authorize online lottery sales, but this commission is also responsible for examining this question.

Who will be on the commission? It will be co-chaired by the Presidents of the House and Senate of the Joint Committee on Economic Development and Emerging Technologies.

Also at the commission:

  • A person appointed from governor with ‘the industry’s expertise in fantasy sports games; “
  • A person appointed by the Massachusetts Gaming Commission;
  • A person appointed by the Attorney General;
  • Two people appointed by the president of the Senate;
  • Two people appointed by the president of the Housing.

The first committee meeting will take place before November, with a report due by July next year.

Impact of the new DFS law

In reality, the short-term impact appears to be fairly minimal. Massachusetts was already one of the friendliest states for DFS, given the actions of AG Healey.

Yet his another ledger victory for DFS, and this helps eliminate any possibility of a legal gray area in another jurisdiction.

The biggest impact could come from the commission, which will help frame the industry so that the legislature can eventually regulate and tax the industry in 2017 or 2018.

The eighth legislature to pass a DFS law in 2016

Massachusetts joins a growing list of states that have passed bills dealing with DFS this year.

The Massachusetts bill is much like the Mississippi bill, in that it creates an end date for the law. The intention is that the legislature adopts a new language before it expires in 2018.

new York also passed a bill this year, but it was pending the signature of Governor Andrew Cuomo for almost a month and a half. When – or if – Cuomo will sign it Remains a mystery.

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