Special iGaming Commission in Massachusetts Recommends Game of Chance Classification for DFS

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.