Attorney General “reviewing” Draft Kings fantasy sports site

"The point is this: This is a new industry." Healey says

BOSTON (State House News Service) – Attorney General Maura Healey, a casino opponent, is reviewing the legality of the ubiquitous Boston-based fantasy sports website Draft Kings.

Asked about the legality of the business that lists its location at Post Office Square, Healey told the News Service on Wednesday, “The point is this: This is a new industry. It’s something that we’re reviewing, and we’ll learn more about it.”

Ads for the site, where money can be won in fantasy sports, are nearly inescapable as the professional football season gets underway.

Congressman Frank Pallone Jr., a New Jersey Democrat, on Monday requested the House Energy and Commerce Committee hold a hearing on the legality of fantasy sports. The congressman said an estimated 57 million people will participate in fantasy sports this year in the U.S. and Canada.

“Fans are currently allowed to risk money on the performance of an individual player. How is that different than wagering money on the outcome of a game?” Pallone asked in a statement.

The site maintains it hosts a game of skill and is legal under U.S. and Canadian law, though it bars residents of Arizona, Iowa, Louisiana, Montana and Washington from participating because of local regulations.

“We take the legal status of our contests very seriously,” the site says in an FAQ on its website. Attempts to reach someone at the company by phone were unsuccessful.

“These are skill-based games that match sports fans against each other in a contest of sports knowledge and strategy that is fundamentally different from wagering on the performance of an individual player or the outcome of a particular game,” Peter Schoenke, chairman of the Fantasy Sports Trade Association, told the Boston Globe in a statement.

Beacon Hill lawmakers on Tuesday heard testimony on bills calling for the Massachusetts Lottery to launch online games and authorizing the Lottery to run a website featuring online skill games, including fantasy sports and poker.

While Lottery vendors expressed concerns that online games would pull customers away from their stores, Sen. Michael Rush (D-West Roxbury) said during the hearing that he felt his proposal (S 191) took into account the concerns from store owners and other stakeholders, while also allowing the state to capture some of the millions of dollars spent annually on fantasy sports and other skill games.

“The future of gaming is before us, and it’s changing very, very quickly,” Rush said. “It’s important that we as the commonwealth grasp it, enhance the technology and move with it.”

Pallone described himself in a press release as “a strong advocate for legalized and regulated professional sports betting and the billions in profits it would bring to New Jersey.”

“Anyone who watched a game this weekend was inundated by commercials for fantasy sports websites, and it’s only the first week of the NFL season,” Pallone said. “These sites are enormously popular, arguably central to the fans’ experience, and professional leagues are seeing the enormous profits as a result. Despite how mainstream these sites have become, the legal landscape governing these activities remains murky and should be reviewed.”

The Professional and Amateur Sports Protection Act of 1992 (PASPA) “prohibits sports betting nationally, except in states in states that legalized sports betting prior to passage of PASPA,” according to Pallone’s office, which said that online sports betting and online gambling are also prohibited under federal law. However, Pallone says federal law also features a fantasy sports “carve out” that the congressman says is a “loophole” that “has blurred the lines between betting conducted through fantasy sports sites and online gambling.”

[Michael Norton contributed reporting]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s