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DraftKings adopts some of AG’s rules plan

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A DraftKings logo was displayed on a board inside of the DFS Players Conference in New York.REUTERS

DraftKings Inc. will announce Friday that it is implementing some of the consumer protection rules proposed by Attorney General Maura Healey , including publicly identifying highly experienced players and banning third-party software that lets players quickly enter hundreds of fantasy sports lineups.

The Boston company remains opposed to some of Healey's fantasy sports regulations, including a minimum player age of 21 and a $1,000 monthly limit on how much money most players could add to their DraftKings accounts.

But Janet Holian, DraftKings' marketing chief, said the measures the company will enact could help ease concerns about casual players being out-matched by professionals who spend hours a day playing the games.


"We certainly hope that our players look at that and say, if there was ever any doubt of a level playing field, that goes away," Holian said.

Healey proposed a series of new operating conditions on daily fantasy sports games in November, saying the industry "cries out for transparency and robust consumer protections."

She held a hearing on the proposal last week, at which the fantasy sports industry lodged objections to some of the proposed regulations, including a ban on fantasy games based on college sports.

A focus of Healey's regulations is giving less experienced players a clearer picture of their opponents, including labeling those who enter hundreds of contests or win several prizes worth $1,000 or more.

Identifying the top players could allow more casual players to know when they're matched up against an experienced foe, Healey has argued, noting that a small percentage of players claim most of the prize money.

"I think there will be people that seek out playing the experienced players, and there may be others who say, you know, I don't think I'm ready yet," Holian said. "We just want to make it transparent, and you can choose."


Healey's regulations would also ban players from using software from third-party vendors to quickly enter and change multiple lineups, a key feature for professionals, who try to increase their odds of winning prizes by submitting hundreds of fantasy rosters.

Those tools have been controversial, with some players questioning whether custom programs give high-powered players an unfair edge. Third-party providers offer similar tools to players of all stripes, but Healey's rules would ban those products.

Her rules would leave space, however, for the fantasy sports operators to offer their own version of that tool, and DraftKings is now doing just that.

Industry experts said DraftKings probably had little choice but to start complying with Healey's proposals.

"They're hoping this is all they're going to have to do in order to survive, as opposed to the alternative, which is their business model no longer exists as they know it," said David O. Klein, a lawyer who advises fantasy sports companies. "They're not doing it until they have to, unfortunately."

"It doesn't necessarily reflect the fact that they think those rules are the right thing to do," said Jeff Ifrah, a lawyer who represents several smaller fantasy sports companies.

A ban on third-party software for entering multiple lineups, known in the industry as "scripts," would cut off some product offerings from startups that have emerged to sell tools to daily fantasy sports players.

But those companies would still be able to offer software that analyzes athlete matchups, weather conditions, and other factors to help players decide which athletes to select for their lineups.


The kinds of functions being absorbed under the DraftKings banner represent "maybe 5 percent of what we do," said Justin Park, cofounder of the fantasy sports tools startup RotoQL.

"It's a very small percentage of people who are creating hundreds of lineups," he said. "Honestly, from a business perspective, it's only a few customers. It's not going to affect our bottom line that much."

Healey is taking comments from the public and industry through Friday, and her office expects to finalize regulations within the next few months.

They would make Massachusetts the first state with specific conditions allowing daily fantasy sports businesses to operate.

Other regulators have reacted more severely.

The most serious challenge has come from New York, where Attorney General Eric Schneiderman sued DraftKings and New York-based FanDuel Inc. for allegedly violating the state's strict anti-gambling laws. The companies are fighting that lawsuit.

Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.