Sports Law

What Attorney General Maura Healey’s Review Could Mean for Daily Fantasy Sports

It was recently announced that Massachusetts Attorney General Maura Healey will be reviewing the legality behind DraftKings – the Boston, Massachusetts based daily fantasy sports operator known as one of the leaders behind the ever-evolving daily fantasy sports industry. This review comes on the heels of United States Representative Frank Pallone requesting a committee hearing to discuss whether fantasy sports are distinguishable from sports betting and other forms of gambling. Upon conclusion of her review, Attorney General Healey’s findings could potentially play in role in determining whether daily fantasy sports constitutes sports betting, an act specifically outlawed by the Professional and Amateur Sports Protection Action Act (PASPA), the federal statute that bans wagering on sports across the United States, except within states that already had existing sports betting operations prior to the enactments of the law.

Nonetheless, it remains to be seen how exactly Attorney General Healey’s findings could have a lasting impact on whether daily fantasy sports operators such as DraftKings and FanDuel continue to operate within the borders of her state. Healey – a staunch opponent of casino gambling – could issue an advisory opinion detailing her findings and highlighting the ways in which she feels daily fantasy sports does not fall within the parameters of the Unlawful Internet Gambling Enforcement Act (UIGEA), the law that specifically exempts fantasy sports from being categorized as sports betting so long as they follow the criteria listed therein.

However, an advisory opinion is just that – an opinion. It has no actual binding authority, and is simply issued as a way to advise on the constitutionality of or to interpret a law. Federal courts and most state courts are prohibited from issuing advisory opinions, and as such, they carry little to no legal effect. Some believe that in a state like Massachusetts – which currently has no laws expressly banning or permitting daily or season-long fantasy sports – the issuance of an advisory opinion going against the legality of daily fantasy sports could carry major repercussions for operators offering pay-for-play games within the state, because such an interpretation could give daily fantasy websites pause as to whether to continue offering such services. Yet, in 1991, former Florida Attorney General, Robert A. Butterworth, issued an advisory opinion cautioning against the alleged perils of fantasy sports and stating that participating in fantasy sports constituted illegal betting under the laws of the Florida. However, to this date, all daily and season long fantasy sports websites operate within the state.

As such, the main effect of Attorney General Healey’s findings would be dependent upon whether it leads the state legislature to issue laws explicitly banning daily fantasy sports or if law enforcement decide to enforce the advisory opinion based upon its interpretation that fantasy sports are illegal. While most states technically have statutes that could be interpreted as criminalizing fantasy sports, the majority of such states have simply failed to enforce such laws. As such, it remains to be seen whether the conclusions of Attorney General Healey would have any impact at all regarding whether major daily fantasy sports website will halt services, or continue to operate, business as usual. Thus, it is imperative for new and upcoming companies contemplating entering the realm of fantasy sports to continue to conduct due diligence in order to remain up to date as to the laws and legal issues they may face as this niche industry continues to come under scrutiny under the eyes of federal and state representatives.