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Massachusetts Examines Legality of Fantasy Sports BettingPublished November 4, 2015 by Elana K
Massachusetts Attorney General promises a "robust" regulatory framework to crack down on online fantasy sports betting.
Fantasy sports betting has been having a rough month. Just last week, Nevada came down hard and ruled that all fantasy sports betting sites are illegal and must be shut down. This week, the Massachusetts Attorney General’s office stated that the only way fantasy sports site will be allowed to continue operating in the state is under a “robust” regulatory framework.
Why the Crackdown on Fantasy Sports?
Fantasy sports has come under the microscope recently for two main reasons: One, a scandal that involved employees placing insider bets and winning boatloads of money. Two, it seems that more and more casinos have been calling for scrutiny of fantasy sports; if online casino gambling needs to be regulated, why doesn’t fantasy sports have to be regulated?
The legal reason, according to federal law, is that fantasy sports are exempt from the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006, the same act that prohibited the operating of online casinos. Fantasy sports companies such as DraftKings and FanDuel have built their empires based on this exception, which is now being challenged in multiple states.
In the case of Massachusetts, the Attorney General has cited consumer protection as the main reason for coming down on fantasy sports. In other cases, such as Nevada, financial gain is a clear motivator; Nevada forced online fantasy sports sites to shut down, but said they can re-open if they get the proper licensing from the state (which costs millions).
DraftKings and FanDuel are not taking this beating lying down; they maintain that they are not gambling sites, as the games are based on skill rather than luck.
As of now, the Massachusetts Attorney General has not set a date for implementing the "robust" regulations, but the Massachusetts Gaming Commission has been reviewing fantasy sports sites, and a five-member panel will meet this week to discuss future legislation.