On September 7, 2017, Attorney General Maura Healey announced that DraftKings Inc. and FanDuel Inc. had agreed to pay a total of $2.6 million to settle unfair and deceptive practices charges. The announcement comes after an investigation was carried out by the Attorney General’s office before the office’s 2016 promulgation of regulations governing daily fantasy sports.
In accordance with two settlement agreements, both companies will pay $1.3 million. The proceeds from the settlements will be utilized by the Attorney General’s office for grant programs to protect consumers and to engage young people in technology. The investigation predated the implementation of consumer protection regulations, which went into effect on July 1, 2016.
The settlement agreements resolve allegations that DraftKings and FanDuel used unfair and deceptive practices before the regulations were put into place. In early 2015, the Attorney General carried out an extensive investigation into the business models and operating practices of both companies. The goal was to gain a better understanding of economic and consumer protection issues associated with fantasy sports.
During the course of the review, the Attorney General’s office concluded that some participants were not adequately protected and that comprehensive consumer-protective regulation was essential. This led to the implementation of the first-of-their-kind consumer protection regulations for the fantasy sports industry.
FanDuel and DraftKings cooperated during the course of the investigation. Both companies also made changes to their business models to better protect consumers with respect to gameplay fairness, protections to minors, fairness in advertising, data and funds security, and responsible gaming requirements. Each company now represents that it is in full compliance with the new regulatory requirements.