Despite Massachusetts being the home to DraftKings, Attorney General Maura Healey said it would be reviewing the legality of daily fantasy sports (DFS). This announcement comes on the heels of a request by Congressman Pallone (NJ) for Congress to hold hearings on the legality of DFS. In a September 14, 2015 letter to the Committee on Energy and Commerce, Pallone did a nice job of laying out the issues around DFS. Other states have also been interested in this topic. Recently, Michigan’s Gaming Control Board issued a statement saying it believed DFS is illegal in Michigan. Potential legislation would provide a path to legalization.
Not all of this attention is a bad thing. On May 19, 2015, Kansas passed a law legalizing fantasy sports under Kansas law, subject to certain qualifications, similar to those in UIGEA. Other states are taking a different approach. California and Texas are considering legalization, subject to requirements for fantasy sports operators to become licensed.
A few things are clear. Fantasy sports, and DFS in particular, are growing in popularity and the prize pools are increasing. The law around some aspects of fantasy sports is murky and it is receiving considerable attention. It will remain important to stay abreast of the legal developments in this area and consider the issues on a state-by-state basis. It is also important to understand that not all fantasy sports models are created equal. It is important to consider the particulars of each fantasy offering and assess its legality.
Please contact us for a copy of our paper on an overview of legal issues with fantasy sports.