A special commission set up to investigate DFS, online gambling and online poker in Massachusetts is recommending that only DFS is regulated at present.
Back in December 2015, we suggested Massachusetts may be the next state to regulate online poker after the Chairman of the Massachusetts Gaming Commission, Stephen Crosby, announced a discussion paper on the issue of regulated online gambling was being prepared by his office.
The discussion paper evolved into a white paper advocating an omnibus iGaming solution, and this led to the establishment of the Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports to investigate the options.
Last week, the commission released a draft of the report it will present to the legislature – subject to the draft being approved by the commission´s full membership. In its current state, the report recommends regulating Daily Fantasy Sports betting, but holding off on the regulation of online gambling and online poker in Massachusetts.
Why Is DFS Getting Regulated on its Own?
At the moment, Massachusetts has what could best be described as “regulation-lite” laws relating to Daily Fantasy Sports betting. These laws were introduced in July 2016 to protect consumers and prevent betting on college events. They are due to expire in June 2018, by which time new laws are expected to be enacted to extract tax revenues from DFS operators.
Effectively, the commission´s hands were tied with what to do about DFS. It couldn´t delay DFS legislation or suggest it should not be legalized. It has therefore suggested DFS be placed under the umbrella of “online gaming”, so the umbrella can be expanded at a later stage to include other forms of online gambling as the Massachusetts Gaming Commission feels fit.
Massachusetts-based DFS operator DraftKings is unhappy with being referred to as an online gambling operator. Its Director of Public Affairs, James Chisholm, complained:
No other state in the country has characterized fantasy sports this way. Get real James. If I am wagering money on the unknown future performance of a sportsperson in return for a potential reward, how is that not gambling?
Issues Holding Back the Regulation of Online Poker
The Special Commission´s draft report recommends holding back the regulation of online gambling and online poker in Massachusetts until after two new resort casinos in Springfield and Everett are operating. These are not due to open their doors until late 2018 and June 2019 respectively, so we could well be into the next decade before online poker in Massachusetts becomes a reality.
There are also political issues to consider. It took a state-wide referendum in 2011 for politicians to be convinced that brick and mortar casinos should be allowed in the Bay State; and, although Stephen Crosby believes that regulated online gambling could help the two fledgling resorts get off the ground, State Treasurer Deborah Goldberg wants to limit any expansion of online gambling to the state lottery.
The commission is also conscious of attempts to prohibit online gambling nationwide. Its report suggests the legislature
continue to evaluate online gambling and activity at state and federal levels – a clear nod to attempts to introduce RAWA-esque legislation in Washington. Although not legally binding, the commission´s recommendations are likely to be adopted by the legislature later in the year.
So, Massachusetts Won´t be the Next State to Regulate Online Poker?
Not necessarily. With politicians in New York seemingly reluctant to agree on proposals to regulate online poker, and politicians in Pennsylvania seemingly unwilling to agree on anything, Massachusetts may still be the next state to regulate online poker. California is out of the picture for the next few years, Michigan has very complicated tribal issues to resolve, and Illinois is looking at more meaningful ways to resolve its budget crisis. We may still be waiting for the next state to regulate online poker in 2020.