Massachusetts Attorney General Maura Healey on Thursday "proposed rules for daily fantasy sports businesses that would ban players younger than 21, seek to prevent sophisticated contestants from dominating games, prohibit contests on college sports, and force the companies to change their advertising practices," according to a front-page piece by Adams & Woodward of the BOSTON GLOBE. The proposed regulations "would make Massachusetts the first state to establish specific conditions that would allow the daily fantasy sports business to operate." Healey has said that Massachusetts law "doesn’t explicitly address the legality of the games." She added that the state needs "a set of clear rules and limitations to ensure the newly emerging industry is run fairly." Healey on Thursday said, "These are games that you carry around with you in your pocket and lose money at the touch of a button. This is an industry ... that cries out for transparency and robust consumer protections." DraftKings and FanDuel each "issued tentative support of Healey’s proposal, though DraftKings expressed 'concerns.'" The companies would be "required to disclose in advertisements they run in Massachusetts how much money the average player wins or loses." They "could not run ads aimed at minors and on college campuses," and Massachusetts residents "would also not be allowed to enter college sports contests." Moreover, professional athletes in Massachusetts and "others affiliated with them, such as agents or team employees, could not enter contests in their respective sports" (BOSTON GLOBE, 11/20).
DIFFERENT STROKES: In N.Y., Joe Drape writes Healey "offered a more tempered opinion of the games" than that of New York AG Eric Schneiderman, "who is trying to shut them down." Healey's proposed regulations would "limit the amount players could deposit monthly to $1,000, unless the operators obtained verification from the players that they had the ability to sustain losses at a higher limit." Healey acknowledged that less than 2% of all players win 90% of all prizes and "called on the companies to offer games that excluded experienced players, preventing casual or beginning players from being exploited" (N.Y. TIMES, 11/20). A BOSTON HERALD editorial states Healey with her proposal "scored a few points for government restraint." Some of the regulations she is proposing "go beyond what they need to, but at least she is letting reality govern her approach to this fantasy world." The editorial: "Healey does lose us in several areas, including the monthly limit on how much a player can deposit unless he proves he can afford to lose more. Adults should be trusted to make their own spending decisions." Other measures "seem tough to enforce" (BOSTON HERALD, 11/20).
HEAVY HITTERS: FanDuel on Thursday announced its new four-person internal advisory board, which will be chaired by former U.S. Attorney Michael Garcia. The newly added members are former U.S. Secretary of Homeland Security Tom Ridge, former Mavericks President & CEO Terdema Ussery and former MLB Exec VP/Business Tim Brosnan (FanDuel).
IS THIS JUST FANTASY? MLB Commissioner Rob Manfred on Thursday cast by far his most downbeat note with regard to DraftKings. The commissioner previously had consistently defended DFS, even as it has come under increased governmental and legal scrutiny. But with DraftKings and FanDuel now locked in a bitter fight to be able to operate in New York, Manfred’s tenor changed on Thursday. He declined to say whether there have been discussions to change or terminate the league's deal, which includes an equity stake in DraftKings. "I’m not going to comment on our correspondence with DraftKings," Manfred said. "We have an arrangement with them. We’re still in that arrangement. When something changes on that, we’ll let you know" (Eric Fisher, Staff Writer).
CAUGHT IN A LANDSLIDE: THE STREET's Eric Jackson wrote now is the time where DraftKings and FanDuel "want to be seeing their revenues and profits taking off." They are "valued at over a billion dollars each," and the "next logical step is an IPO to help cash out earlier investors and raise even more capital for themselves." But government regulation, declining growth and a cool IPO market are "big hurdles that the companies will have to overcome." For Yahoo, DFS is "such a small speck in its overall business that it could be shut down tomorrow and it would not be a big deal." The "best bet" for DraftKings and FanDuel "would be to merge now." They "could be headed toward government licensing." Jackson: "I just don't think they'll be able to make it as two companies" (THESTREET.com, 11/19).
