Draftkings and Fanduel to Pay $2.6 Million to Resolve AG Investigation Into Pre-regulation Conduct
AG’s Office Reviewed Economic and Consumer Protection Issues Related to Daily Fantasy Sports
BOSTON – DraftKings, Inc. and FanDuel, Inc. will pay a total of $2.6 million after an investigation by Attorney General Maura Healey into alleged unfair and deceptive practices by the companies prior to her office’s 2016 promulgation of regulations governing daily fantasy sports.
Through two settlement agreements reached with the companies, DraftKings and FanDuel will each pay $1.3 million. Funds from these settlements will be used by the AG’s Office for 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,” said AG Healey. “We have since implemented a set of comprehensive regulations that provide consumers with broad-ranging protections and that have served as a model for many other states.”
The AG’s investigation predated the office’s implementation of consumer protection regulations that went into effect on July 1, 2016. These settlement agreements resolve the allegations of unfair and deceptive practices used by DraftKings and FanDuel before the regulations were effective.
Beginning in early 2015, the AG’s Office conducted an extensive investigation into the business model and operating practices of fantasy sports operators, including DraftKings and FanDuel, in order to understand various economic and consumer protection issues.
As a part of that review, the AG’s Office found that some participants in daily fantasy sports contests were not adequately protected and that comprehensive consumer-protective regulation was needed. In response to concerns uncovered during its review, the AG’s Office proposed and implemented first-of-their-kind consumer protection regulations for the fantasy sports industry.
Both DraftKings and FanDuel cooperated throughout the investigation and have made significant changes to their business models to protect consumers with respect to gameplay fairness, protections for minors, responsible gaming requirements, fairness in advertising, and data and funds security. Each company represents that it is now in full compliance with the applicable regulatory requirements.
This matter was handled by Assistant Attorney General Dan Krockmalnic of the AG’s Consumer Protection Division and Gary Klein, Senior Trial Counsel in the AG’s Public Protection and Advocacy Bureau.