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AG Healey: Fantasy sports websites need to be regulated

October 20, 2015

BOSTON (AP) — Massachusetts Attorney General Maura Healey says there’s little question that fantasy sports websites need to be regulated to protect consumers.

Healey made the comments through a spokeswoman Monday as Gov. Charlie Baker and the state’s two top legislative leaders weighed whether — and to what extent — the state should regulate fantasy sports.

“The federal statute dealing with unlawful Internet gambling left to the states the ability to regulate fantasy sports,” Healey spokeswoman Cyndi Roy Gonzalez said in a written statement. “We are seeking extensive information about the industry and have spoken with the leading companies directly as part of this review.”

Gonzalez added: “There is little question that this industry will need to be regulated in order to protect consumers.”

Healey had previously said she’s concerned about reports about insider activity that would have put average players at a competitive disadvantage.

Baker, a Republican, and Democrats Senate President Stan Rosenberg and House Speaker Robert DeLeo all said they were waiting to hear from Healey, who said she’ll make her findings and recommendations public when she concludes her review, which began with Boston-based fantasy sports website DraftKings.

She has said that she’s not conducting a criminal inquiry into DraftKings and isn’t looking to shut them down. DraftKings has said its executives are happy to work with Healey to answer her questions

Rosenberg said he believes fantasy sports websites amount to gambling and should be regulated and taxed in Massachusetts.

“There are a lot of people who are engaging in an activity in which they are effectively placing wagers, and they’re collecting money if they win and therefore it’s a form of gambling,” Rosenberg said.

Rosenberg said he wasn’t sure if fantasy sports were explicitly covered by the state law which legalized casino gambling and created the Massachusetts Gaming Commission. But he said either way, the websites should be regulated.

DeLeo say he isn’t sure about the need for regulations, but is waiting for Healey’s full report.

Baker said he shares concerns about the need for a framework, but also is waiting for word from Healey.

“Does a game that involves a significant amount of thinking, strategizing tactics and risk fall into the existing statute or not?” Baker said Monday after a regular weekly meeting with Rosenberg and DeLeo. “That’s something we can ask her and I think we probably should.”

Baker also said that the explosion in popularity of fantasy sports is “one of those things that kind of came up out of nowhere” when smart people use the Internet in new and unexpected ways — comparing it in part to ride-sharing companies like Uber.

Daily fantasy sports participants put together virtual teams based on real players and compete for points based on the players’ statistics. Paid contests cost as little as $1 to enter, but some players wager tens of thousands of dollars on each matchup.

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