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Days after issuing a draft document which recommended the state classify daily fantasy sports (DFS) as “online gaming,” a special panel appointed to study iGaming legislation in Massachusetts has voted to finalize their report.
The Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports – which was created last September after the state passed DFS legislation – released its draft report on July 25. The Commission had been tasked with studying all forms of online gambling, including poker, casino games, and DFS, before reporting their findings and recommendations to the state legislature.
The panel, which includes Massachusetts Gaming Commission (MGC) Chairman Stephen Crosby, then held a formal vote on July 31 – the stated deadline for its report to be delivered. By a 5-3 margin, the Commissioners elected to approve that report and send it on to lawmakers for review.
In their final findings, the Commission recommended that DFS remain fully legalized in Massachusetts – but that it should be regulated as online gaming rather than a game of skill:
“At this time, the Special Commission recommends legalizing DFS as a subset of online gaming and enacting legislation that would put into law the proposed regulatory, governance, and taxation system described above,” the report says.
“However, the Special Commission recommends not legalizing more expansive online gaming at present, particularly in consideration of the fact that two resort casinos are not yet open, but urges re-evaluation in the near future and legislative oversight to continue to evaluate online gaming and activity at state and federal levels.”
The decision has drawn the ire of DraftKings and FanDuel, the two major operators within the DFS space, as both companies have argued consistently for the game of skill designation.
James Chisholm, who serves as director of public affairs for DraftKings, issued a statement addressing the Commission’s findings:
“While this commission report is merely a recommendation, it runs directly counter to the economic development law that overwhelmingly passed last year designed to promote the state’s Innovation Economy. The commission’s actions today, as we and our partners in the fantasy sports industry pointed out time and time again, could restrain our company’s ability to thrive and create jobs here in Massachusetts.
These recommendations if ever adopted would put us behind every other state in the country on this issue, and send a troubling message to other startups. We urge Governor Baker, Speaker DeLeo, Senate President Rosenberg, and rest of the Legislature to reaffirm their commitment to Massachusetts startups and reject these ill-advised recommendations in whatever legislation is finalized.”
FanDuel declined to offer comment on the matter, but considering that the two companies have recently issued joint statements on other subjects, the second-leading DFS operator is ostensibly opposed to the panel’s findings as well.
In October of last year, shortly after joining the Commission, Crosby outlined his stance on DFS’ ongoing debate over the role of skill versus chance in an interview with Global Gaming Business Magazine:
“There have been millions of dollars spent litigating whether DFS is a game of skill or a game of chance, and if it’s some skill is it enough skill to make it avoid the regulations of games of chance. That just makes no sense to me.
“What difference does it make as a matter of public policy whether you gamble on the throw of dice or the throw of a dart? Does it make any difference that one is skillful and one is pure chance? Should they be regulated any different? I just don’t get that.”
The current legislation deeming DFS to be legal in Massachusetts includes a sunset provision, which allows the law to expire in August of 2018.
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A gambling experience that essentially offers sports betting in disguise may soon go live in New Jersey, courtesy of Resorts Casino and Hotel in Atlantic City.
In the May 6 edition of his column on ESPN.com, gambling industry writer David Purdum reported that Resorts is nearing completion of a new 1,200-square foot iGaming Lounge. When finished, the new venue is designed to host a new game known as FastPick, which offers players a house-banked fantasy sports style wagering experience.
The launch of FastPick is subject to approval by the New Jersey Department of Gaming Enforcement (NJDGE), but per Purdum’s reporting, Resorts staff is busy installing cashier’s cages and high-definition video screens in anticipation of FastPick’s brick and mortar debut.
Under the FastPick format, players must select the winners of between three and 10 matchups involving individual players, as based on statistical performance using a standard daily fantasy sports (DFS) scoring system.
The SportAD.co website offers the following description of FastPick’s “Head to Head” gameplay format:
“In its simplest form, users make predictions on which athlete will score more from our pairings. Results are based on our rigorously formulated scoring schemas and winnings determined by the number of selections made.”
Purdum says a standalone website offering FastPick games will go live sometime this month.
FastPick is produced by the Washington D.C.-based Sport Analytics & Data Corp (SportAD).
Joe Brennan, co-founder and chief executive officer, previously operated DFS site Fast Fantasy. After pivoting to a business-to-business approach in 2015, Brennan envisioned the FastPick model as a streamlined version of DFS which would successfully toe the line between state gaming regulations and federal law.
New Jersey law was amended in 2012 to allow for paid fantasy sports within casinos, under certain conditions like the multiple selection parlay wagering offered by FastPick.
Under the terms of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, fantasy sports are exempted from the online gambling ban – so long as they aren’t based on the performance of a single athlete.
Brennan told Purdum how his FastPick concept hews closely to both legal statutes, while predicting that DFS players would be joined by traditional sports bettors when the Resorts iGaming Lounge officially launched:
“We wanted to get something as close to a traditional single-game play as we [could], but still have it be compliant with fantasy rules. I think this is as close as you can get right now.
The opportunity here is not just with existing fantasy players. But it’s also migrating over sports betting customers to what is essentially one of the only legal opportunities that they would have that doesn’t require a major cultural shift in the way that they bet.”
During an interview with NJOnlineGambling.com which was published on May 4, Brennan spoke about FastPick’s appeal to major land-based gaming operators:
“Casinos (like Resorts) are intrigued by the audience that gravitates to DFS – young males with disposable income. They’re trying to capture that audience for their brick-and-mortar establishments.
We’re very excited to be launching with them. They’re already partnered with names such as PokerStars and Mohegan Sun Casino. We trust in them, based on their success.”
As Brennan mentioned, Resorts currently maintains three online casino and/or poker room platforms under its New Jersey interactive gaming license: Resorts, Mohegan Sun, and PokerStars.
If approved, the FastPick games at Resorts will offer a selection of 20 head-to-head contests between individual players. Gamblers must select at least three matchup winners, or any number up to 10 total, with wagering limits set at $ 1 through $ 10,000.
A longstanding industry suspicion was confirmed in Oregon with nothing but a check mark, as a lobbyist representing International Game Technology (IGT) officially aligned the company in opposition to daily fantasy sports (DFS).
At a March 29 public hearing held by the Oregon House Committee on Business and Labor, state legislators heard comments and testimony on a pair of DFS-related bills introduced this year: HB-2549 and HB-2761.
The first bill, introduced in January by Representative Jodi Hack (R-19), would direct the Oregon State Lottery Commission to oversee the regulation of legal DFS contests for real money. Crucially, HB-2549 states that DFS is a game of skill, observing that “winning outcomes reflect the knowledge and skill of the fantasy contest players.”
The second bill, introduced in February and sponsored by the Committee on Business and Labor, would classify DFS as a “contest of chance” within the state’s overall system of gambling law. In effect, HB-2761’s passage would deem DFS to be an unlawful gambling activity under Oregon state law.
John Powell, who attended the hearing as a lobbyist for IGT, signed a pair of Witness Registration documents – one opposing HB-2549 and another supporting HB-2761. This marked the first public position on the DFS industry taken by IGT, following years of neutrality and silence on the issue.
The two major operators within the DFS industry – DraftKings and FanDuel – both hold an operational philosophy that sees them withdraw from any market which classifies their business model as chance-based gambling rather than a skill-based competition.
Thus, IGT’s support of HB-2761 in Oregon can be interpreted as the casino gambling equipment titan working to push DraftKings and FanDuel out of the state. That interpretation is bolstered by the fact that IGT signed an exclusive agreement with the Oregon Lottery last year, one which saw the company ship 1,500 video lottery terminals (VLTs) to the state.
According to Marc La Vorgna, who serves as a spokesperson for both DraftKings and FanDuel, the VLT deal provides IGT with incentive to corner the fantasy sports market for itself. La Vorgna spoke with Dustin Gouker of Legal Sports Report on April 13 to outline his theory on IGT’s renewed resistance to DFS in Oregon:
“It’s all a phony effort to use their government contracts – where they take tens of millions from taxpayers – to block competition and create some kind of cheap, scratch-off version of fantasy sports for them to profit off.
But we were glad to see in Oregon, IGT was finally willing to put their name on being anti-fantasy sports.”
During the public hearing, Committee chairman Representative Paul Holvey (D-8) and his colleagues heard testimony from several stakeholders on both sides of the DFS debate.
Organizations like the Oregon Council on Problem Gambling and the Lane County Public Health Department commented on the need for greater consumer protections to protect against addiction.
Daniel Haight of Yahoo Fantasy Sports, a mid-major DFS operator, offered its full support for HB-2549 and its game of skill designation.
One organization offered particularly strenuous opposition to DFS during the hearing, as the newly formed Stop Daily Fantasy Gambling (SDFG) issued a stern rebuke of the industry as a whole.
Michael Grimes, the lobby group’s executive director, provided the following testimony in support of HB-2761:
“Many states across the nation are struggling with the question of whether and how to allow online daily fantasy sports gambling amid an aggressive legislative push by the big companies that run these games of chance, and the approach taken by HB 2761 will ensure the best interests of the citizens of Oregon are protected.”
Speaking with Legal Online Sports, La Forgna cast doubt on the legitimacy of SDFG’s efforts, even making an as yet unsubstantiated claim linking them to IGT:
“They have been operating in the shadows, building a sham, astroturf anti-fantasy sports group based out of Texas. Three people on the board, one is a San Francisco attorney who has represented IGT interests for 20 years – not a coincidence.”
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