Attorney General Maura Healey has the power to shut down the fantasy sports business in Massachusetts. So why isn’t she using it?
She's not a gambling fan — and gambling, she now agrees, is what fantasy sports websites promote.
Indeed, as a candidate for AG, Healey favored repeal of the 2011 law legalizing casinos in Massachusetts. She also called out her Democratic primary opponent for his association with an online gambling company. More recently, she tried to thwart Steve Wynn from moving forward with plans for an Everett casino, citing traffic and environmental concerns in an unsuccessful effort to trip him up.
But when it comes to regulating Boston-based DraftKings, and other fantasy sports websites, Healey is choosing not to use a tool clearly at her disposal — the state's illegal lottery statute. The law, which goes back to 1719 but was updated in the 1960s, says that anyone "who sets up or promotes a lottery for money . . . connected with chance by lot, dice, numbers, game, hazard or other gambling device . . . that is not taking place in a state-licensed gaming establishment" can be criminally prosecuted.
In an interview, Healey said she could use that Massachusetts law to issue a cease-and-desist order — just like New York Attorney General Eric Schneiderman, who ordered DraftKings and FanDuel, the two leading daily fantasy sports companies, to stop taking bets from that state's residents because, he said, they violated state gambling law.
But Healey is avoiding a New York-style hammer. Instead, she is chiseling out a path for DraftKings and other such companies to do business in Massachusetts — which, legally, is where New York may end up anyway. Her office, said Healey, is working to come up with "a robust legal and regulatory framework" for the fantasy sports industry. "I've taken the tack that my job is to set forth what I think should happen for a robust framework that doesn't exist today. It's not black or white," said Healey.
Her approach, she insists, is all about the facts and the law — and not about the huge amount of money at stake or the powers behind it.
It doesn't matter, said Healey, that New England Patriots owner Robert Kraft is an investor, through the Kraft Group, in DraftKings. Nor does it matter that Healey and Kraft just recently announced a joint initiative to raise teenage awareness about domestic violence and sexual assault. The Patriots owner is pledging to put $500,000 towards that effort.
The fact that former AG Martha Coakley — Healey's former boss — now represents DraftKings as it fights to keep its business alive in Massachusetts, is also irrelevant, the AG said.
Healey said she hasn't spoken about the DraftKings matter to Coakley, Kraft, or anyone else associated with the Patriots. "I got elected to enforce the law, to look at the facts, and to exercise prosecutorial discretion. That's what I'm trying to do," said Healey. "But I understand why someone asks the questions."
Questions also arise because Healey used her strong opposition to gambling to distinguish herself from primary opponent Warren Tolman in 2014's AG race. At the state nominating convention, Healey pointed to casinos as a road to addiction, bankruptcies, and foreclosures. During the primary campaign, Healey also said she found Tolman's past association with Fast Strike Games, an online gaming group, "troubling" because it targeted young people. She suggested it raised doubts about his willingness to oversee regulation of the state's fledgling casino industry.
Asked about that, Healey stressed she is "entirely consistent" in her position. "I still don't think gambling is a good thing," she said, "and I'm now in a position to enforce the law here."
She will tame "the wild west" of fantasy sports gambling by proposing "the strongest, most robust consumer protection template out there." It will "protect minors, protect against problem gambling, and provide the clearest form of disclosure to those who want to participate."
If lawmakers want to ban this industry, said Healey, they can. But it doesn't sound like she's about to propose that outcome.
Does that represent a pro-innovation mindset in a state that has already sanctioned gambling via state-run lottery and state-licensed casinos? Or is it also about accommodating powerful local interests?
I bet there's some of both.