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AG to issue final rules for fantasy sports Friday

Massachusetts Attorney General Maura Healey during an editorial board interview at The Boston Globe.
Massachusetts Attorney General Maura Healey during an editorial board interview at The Boston Globe. Craig F. Walker/Globe staff

Attorney General Maura Healey said Wednesday that she will issue final regulations for the daily fantasy sports business at the end of the week, including a ban on contests involving college sports.

Healey, in a wide-ranging interview with the Globe editorial board, said the final regulations will largely mirror a set of draft regulations she issued in November.

“This is about protecting consumers, this is about protecting and mitigating . . . addictive behavior, this is about transparency, fairness, and fair play,” she said.

Healey’s office confirmed afterward that the final rules — like the draft rules — will include a prohibition on daily fantasy sports players under the age of 21, restrictions on advertising to minors, and protections for inexperienced players who often lose contests to professionals.

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Daily fantasy companies, like Boston-based DraftKings Inc., allow players to assemble fictional rosters of real-life athletes and collect points based on their on-field performance. Prizes in the largest contests can exceed $1 million.

Scrutiny of the industry intensified last fall, when a DraftKings employee prematurely published internal data that sophisticated players could use to their advantage. That weekend, the same employee won $350,000 in a contest on a rival site, FanDuel.

The draft regulations Healey released in November are widely considered among the most comprehensive in the nation.

David O. Klein, a lawyer who represents daily fantasy companies, said Wednesday that he has been pleased with Healey’s overall approach. “It allows these contests to continue and survive,” he said.

He said he has some qualms about the ban on college contests, but understands concerns that they may attract “untoward personalities” trying to shape the outcome of collegiate sports to produce windfalls for fantasy sports players.

A DraftKings spokesman said in a statement that the company appreciates Healey’s “thoughtful approach to regulation.”

“Her willingness to thoroughly understand our new industry in order to ensure the proper consumer protections are in place while also allowing the company to continue to innovate, grow and thrive will be important to our success in Boston,” the statement read. “We look forward to seeing the final regulations and will work diligently to ensure we are in compliance as soon as possible.”

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FanDuel Inc. of New York declined to comment.

Regulation of the nascent industry is among the highest profile issues Healey has faced in her first 15 months in office. She’s also made battling the state’s opioid epidemic a top priority. And the attorney general, who spoke to Globe reporters and editors for over an hour on Wednesday, vowed to continue with that effort.

She said her office would look at “the sales and marketing practices of pharmaceutical companies, who in large part got us into this current mess.” Healey promised work at the intersection of substance abuse and mental health, too, enforcing laws requiring insurers to treat mental and physical maladies equally.

Healey also said she would focus on issues of economic security in the coming months. She touted her creation of a Student Loan Assistance Unit and hot line aimed at helping students struggling to repay debts. And she hinted at a forthcoming announcement involving student debt.

Her office later said it would involve the opportunity for loan forgiveness for a subset of students who attended Corinthian Colleges, a for-profit chain that has become a symbol of fraud in higher education.

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Healey held a public hearing on her draft fantasy sports regulations in January and the industry has been waiting on issuance of the final rules.

The draft regulations include a $1,000-per-month deposit limit for all players, unless companies can verify that the players can sustain higher losses.

Healey’s office could not confirm Wednesday that the $1,000 figure will appear in the final regulations, to be released Friday. But the attorney general, in her meeting at the Globe, said the broad concept — requiring companies to verify that a player can afford to lose more money before allowing a larger deposit — will be in the final rules.

One of Healey’s major aims is protecting casual players. The draft rules require daily fantasy companies to clearly identify professional players by putting symbols next to their names. Firms would also have to create more contests reserved for beginners.

Healey can implement the final regulations on her own. She does not need sign-off from state lawmakers.


David Scharfenberg can be reached at david.scharfenberg
@globe.com
. Follow him on Twitter @dscharfGlobe