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Mass. Gaming Commission Considers Regulating DraftKings Like A Casino03:36
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DraftKings advertisements at South Station (Jesse Costa/WBUR)
DraftKings advertisements at South Station (Jesse Costa/WBUR)
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Sitting behind his name card in a gray conference room at Hynes Convention Center, state Gaming Commission Chair Steve Crosby said Thursday that state law does not give his commission the authority to regulate daily fantasy sports companies like Boston-based DraftKings.

"We do, however, have an interest in the gaming world," Crosby said at the commission meeting. "And we have a lot of experience in the issues of whether and how to regulate, whether and how to license and so forth."

And at least some members of the commission seem open, perhaps even eager, to be a part of a new regulatory scheme of the fledgling industry. Daily fantasy sports has been growing quickly in users and in public awareness, partly due to questions about its practices.

Commissioner Gayle Cameron says she and other gambling regulators have been raising questions about the industry that lets consumers make up rosters of pro sports players and compete for cash.

"Can the system be hacked?" Cameron wondered. "Can the account be altered? Can the outcome be altered? Can you change your lineup after you’ve submitted it?"

Cameron says she’s been talking to experts.

"I certainly was convinced that this is an area which should be regulated. I’ve spent a good deal of my career in New Jersey dealing with illegal sports betting, and I’ve seen the harm," she said.

Commissioner Enrique Zuniga argued for regulating daily fantasy sports like gambling.

"There’s enough similarities to other forms of gambling that have been widely accepted as gambling that it merits the regulation that Commissioner Cameron and everybody seems to be coalescing around," Zuniga said.

But Crosby, chair of the gambling commission, warned about overreacting.

"If we came in heavy on this, you can crush an industry like this overnight."

Steve Crosby

"If we came in heavy on this, you can crush an industry like this overnight," he said. "There needs to be some contextual framework that gives reason to where we propose coming down on this."

Crosby’s careful consideration must have sounded good to Stephen Martino, a lawyer representing FanDuel, the other chief industry player besides DraftKings.

"Obviously we are concerned that if you impose a casino gaming-style of regulation into this industry, it’s going to make it very difficult for the industry to grow and prosper," said Martino, a lawyer at Baltimore law firm Duane Morris.

But that’s not to say the industry is not open to some regulation.

FanDuel CEO Nigel Eccles published a letter to its customers Thursday.

"To be clear, our industry needs strong, commonsense, enforceable consumer protection requirements to ensure its continued growth and success," Eccles wrote.

Martino says FanDuel is looking forward to taking up the Massachusetts Gaming Commission on the offer to hear from daily fantasy sports companies.

"They’d indicated that they’d wanted to have a discussion with the industry to gather information, and we’ll be responsive to that," he said.

DraftKings will be responsive, too.

"We are committed to working with all relevant government authorities to ensure that the industry operates in a manner that is completely transparent and fair for all consumers," said CEO Jason Robins said in a statement Thursday.

As those discussions take place over the next few weeks, the Massachusetts Gaming Commission says it will write up a policy proposal to give to state lawmakers, the attorney general and the governor.

This segment aired on October 30, 2015.

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Curt Nickisch Twitter Business & Technology Reporter
Curt Nickisch was formerly WBUR's business and technology reporter.

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