March 30, 2016
Last week, Massachusetts Attorney General Maura Healey officially filed a comprehensive regulatory regime intended to govern and oversee the fantasy sports industry in the State, joining Indiana and Virginia as the first such states to introduce industry regulation.
What are some key provisions of the new Massachusetts fantasy sports regulatory scheme?
Compliance with the regulations will remove any subject fantasy sports contest from the purview of the State anti-gambling statutes. Nevertheless, Attorney General Healey has unveiled the most comprehensive and wide-reaching regulations governing fantasy sports contests and operators, to date, which include the following non-exhaustive mandates:
- Participants must be at least 21 years of age;
- Employees and independent contracts must be prevented from entering fantasy sports contests;
- Operators must develop protocols for data privacy and security;
- Operators must adhere to strict advertising standards regarding representations concerning, among others things, potential winnings;
- Operators must identify “highly experienced players” on their platforms;
- Operators must offer beginner contests and ensure that non-beginners are not allowed to enter such contests;
- Operators must prevent participants from using proxies to access their websites;
- Operators must limit the number of entries that a single user can submit to a given contest.
The regulations mandate that operators implement the necessary changes by July 1, 2016 to become compliant.
The Continued Push to Regulate the Fantasy Sports Industry
Massachusetts’s broad regulatory framework comes on the heels the announcements from Indiana and Virginia of the implementation of their respective regulatory schemes for fantasy sports contests and operators. In addition to these states, similar legislative initiatives have been undertaken in statehouses across the country including, among others, Wisconsin, Missouri, California and Florida. As fantasy sports contests, and the laws and regulations that govern them, continue to grow and evolve, it is essential that fantasy sports enterprises keep abreast of the developing legal landscape. Operators should regularly review their respective contest platforms, entry fee and prize structures with knowledgeable counsel in order to effectively navigate this rapidly changing regulatory framework.
If you are interested in learning more about this topic or pursuing a fantasy sports venture, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
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