DraftKings and FanDuel Settle with Massachusetts for $1.3 Million Each
DraftKings and FanDuel have struck a deal with the Massachusetts Attorney General that will allow them to operate in the state, despite claims that they’ve engaged in unfair consumer practices. As part of the arrangement, each company will pay out a $1.3 million fine and accept certain changes to their business practices in the state.
The two daily fantasy sports giants struck the deal with the Massachusetts Attorney General’s office on the eve of Thursday night’s NFL regular season opener. That’s absolutely critical for both DraftKings and FanDuel as almost all of their US business is conducted during NFL season.
Law enforcement officials in Massachusetts have been looking into FanDuel and DraftKing’s business practices for the past two years and felt like consumers simply weren’t getting enough protection from what the AG’s office considered to be unfair business practices. In particular, Massachusetts law enforcement thought that the companies weren’t doing a very good job of letting their customers know how slim their chances of actually winning cash on the sites were.
Those days, according to FanDuel spokesperson Justine Sacco, are in the past. In a statement to ESPN.com she said:
We have worked closely with the Massachusetts Attorney General’s Office in their review of fantasy sports, including their issuance of the first set of consumer protection regulations for our industry, which we were pleased to comply with since their inception in 2016.
Over on the DraftKings’ side, the company’s general counsel Tim Parilla praised the Massachusetts AG saying:
Over the last two years, the attorney general’s office has done an excellent job of working to fully understand DraftKings, our business and the fantasy sports industry. That expertise informed the Massachusetts regulations which have now become the national model for common sense, consumer-focused fantasy sports regulations.
In the wake of the US government’s decision to pull the plug on a proposed DraftKings/FanDuel merger, these words of praise are not particularly surprising. After all, at this point both companies need every single customer they can come up with.