DraftKings, FanDuel settle with Bay State for $2.6M

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The two heavyweights in the world of daily fantasy sports will pay Massachusetts $2.6 million to settle alleged unfair and deceptive practices prior to the state creating regulations for the burgeoning industry.

Attorney General Maura Healey announced the settlements with Boston-based DraftKings Inc. and New York-based FanDuel Inc. yesterday and indicated that both companies will pay $1.3 million. That money, according to a statement, will be used in “grant programs to protect consumers and engage young people in technology.”

“I am glad to have reached these settlements to address various consumer issues that existed at the early stages of this new industry,” Healey said in a statement. The accusations of unfair and deceptive practices came up before Healey’s office created 2016 regulations governing daily fantasy sports. Healey’s office began investigating how the companies did business in early 2015 and found that “some participants in daily fantasy sports contests were not adequately protected,” according to the statement.

Healey’s office said both companies have since changed their business models.

“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,” a FanDuel spokesman said in a prepared statement.

Tim Parilla, an attorney for DraftKings, said in a statement that the company is “pleased to have reached this agreement with the Massachusetts Attorney General’s office and conclude what has been a productive and collaborative process.”

http://www.bostonherald.com/business/business_markets/2017/09/draftkings_fanduel_settle_with_bay_state_for_26m