Mass. AG hopeful aided online gambling venture
As he seeks the Democratic nomination for attorney general, Warren Tolman talks about his working-class roots, his two prior runs for statewide office, and his tenure in the Legislature.
What does not come up as often is the work he did for roughly two years promoting technology that would make betting more appealing to young people.
On Monday morning, Tolman was listed as director of business development at Fast Strike Games, which specializes in “the design of interactive games that are fun, easy to play, and offer large prizes.” The Quincy firm promotes its games as playable on social media and mobile devices. It hopes to join with state lotteries to run cash-payout fantasy sports games.
By Monday evening, after the Globe inquired about Tolman’s role with the firm, Fast Strike had removed his picture and biography from its website. In an interview, Tolman said he suspended his work for the company several months ago and never drew pay. A Tolman adviser said the candidate maintains an equity share of about 40 percent, but the firm has not yet yielded revenue; Tolman would sever his ties to the firm if he is elected.
As attorney general, Tolman would enforce state gambling laws.
For games like Fast Strike’s to begin operating in Massachusetts, the Legislature would need to pass a law for the lottery to move into the online sports gaming market, state finance officials said.
State law bars online sales of lottery tickets, and federal law prohibits sports betting in most states, though it is unclear whether the type of game promoted by Fast Strike would fall under the federal ban. Tolman said he was uncertain whether Fast Strike’s style of gaming would require a change in federal policy, which bars sports betting.
Rapid industry developments have opened the possibility that certain types of online sports betting could become legal here in coming years. In anticipation of that happening, companies like Fast Strike are developing technology that will help position them to capitalize. Tolman said he was unaware of exactly which policy changes would allow the firm to work with the Massachusetts State Lottery.
Tolman is facing former assistant attorney general Maura Healey for the Democratic nomination, seeking favor among a primary electorate that has traditionally been leery of expanded gambling. Healey has said she would work to repeal the 2011 state law sanctioning casinos, while Tolman has opposed repeal.
Tolman said Tuesday that his work with Fast Strike was “very much a part-time endeavor” that he had ended “about the beginning of the year.”
“This is very much in my rearview mirror,” Tolman said.
Tolman launched his bid for the state’s top law enforcement position in November, three months after filing a patent application. He cosigned the patent application, along with the company’s chief executive, Scott Oddo.
Tolman’s online campaign biography makes no mention of the gambling company. Instead, it mentions his stint in the state Legislature from 1991 to 1999, previous runs for statewide office, and a decade at Holland and Knight, the law firm that Tolman says he left around the same time as his departure from Fast Strike.
Fast Strike is hoping to join with state lottery systems, which are looking to expand their menus of betting opportunities.
In a telephone interview, Tolman said, “This was an opportunity, and we thought it was better to have it done with the lotteries, with regulations, where they could deal with issues that might pop up and where people were accountable to the voters.”
Tolman said he had met with Massachusetts State Lottery officials last year while he worked at Fast Strike, but described the discussions as preliminary.
“They were interested, but it was obvious that there wasn’t going to be anything that would happen anytime soon,” he said
In an overview on an initial investors’ site, the company said that its online games would “appeal to an untapped 18-to-39-year-old demographic and dramatically reduce the cost of operations.” The firm also promotes its ability to market via smartphones and other hand-held devices.
“Mobile apps are a powerful way to extend lottery games,” the company website reads. “. . . A lottery mobile app would bring in younger users than the typical lottery game.”
As Massachusetts prepares to plunge into the casino market, awareness about gambling addiction and the attendant social problems has grown more acute. Online gambling is even more controversial, because some research shows that it increases the likelihood of addiction, particularly in mobile devices. Some programs allow credit card information to be stored and for wagers to be placed with a few clicks.
In the August 2013 patent application, Tolman and his business partner wrote that their technology would incorporate “a human component” to build “excitement and unpredictability.” Experts say the pace and availability of online gaming make it more likely to contribute to addiction.
“There’s a reason that even traditional casinos have gone that way, the reason slot machines are looking more like Internet games,” said Jon Grant, a professor in the University of Chicago department of psychiatry and behavioral neuroscience who studies addiction. “Anything that’s faster paced, anything that’s got more behavioral reinforcement over and over and over again, is likely more addictive.”
Boston’s new free wireless effort, Wicked Free Wi-Fi, has classified gambling websites alongside pornography and pirated material as content that users will not be able to use.
According to a business prospectus obtained by the Globe, Fast Strike planned to expand its football game to Massachusetts this year, followed by its March Madness game next year and a baseball game in 2016.
The same document promotes Tolman’s political roots in Massachusetts, saying, “One of our greatest assets is our knowledge of the legislative process and familiarity with the lottery program.”
Campaign manager Chris Joyce said Tolman did not write the prospectus, and believed it was written by Oddo, the chief executive.
The Justice Department issued an opinion in late 2011 that encouraged some states to begin offering lottery sales online.
Policy makers say there is still a thicket of state and federal legal and regulatory hurdles to overcome before ventures like Tolman’s could become a reality in Massachusetts.
State Senator Jennifer L. Flanagan, a Leominster Democrat expected to take the lead on formulating Senate gaming policy formulations, said: “There’s a whole host of regulatory issues that have to come forward before that. But the other thing, too, is we need to make sure Massachusetts can handle the casinos.”
Fast Strike’s prospectus lays out yearly revenue projections that forecast more than 8 million users by 2018, with revenue over $127 million and 112 employees that year.
Such figures could prove tremendously appealing to policy makers in various states, desperate to plug budget holes with new sources of lottery revenues.
The Rev. Richard McGowan, a Boston College professor with a specialty in gambling policy, said his research shows that in nations that have legalized Internet sports gambling, 60 percent of online gambling revenue comes from sports books.
Stateside, he said, the hefty impact in online betting is on hold due to the federal ban on sports betting.
“The states that have legalized online gambling, really have not seen much of an increase, per se,” McGowan said. “That is also because they have not hit sports gambling.”
If states like Massachusetts get the federal green light and begin legalizing online sports gambling, he said, “boy, are you talking about an addiction problem that’s going to be unbelievable.”