With the State legislative session set to expire, Massachusetts lawmakers passed a bill late Sunday night to formally legalize daily fantasy sports in the Commonwealth. While other states that have recently legalized fantasy sports have employed tax and regulation schemes, Massachusetts has opted to take a different approach, at least in the short term.

How does Massachusetts’ bill differ from other legalization efforts?

As we blogged earlier this year, Massachusetts Attorney General Maura Healey formatted a comprehensive regulatory regime intended to govern the fantasy sports industry. If written into law, the bill will allow any fantasy sports operator that conducts business in accordance with those regulations to legally offer contests that reward cash prizes through July 2018 (when the law is scheduled to be re-evaluated). The bill does not immediately impose any taxes or licensing fees to operate within the State. However, the bill provides for the creation of a commission tasked with studying fantasy sports and online gambling, with the intention of reporting back to the legislature on how to potentially tax and regulate the industry at some future date. The bill has been sent to the Governor’s desk for signature and adoption.

Keeping Your Fantasy Sports Venture Compliant

Massachusetts had already established itself as one of the friendlier states for fantasy sports operators. Now it appears poised to join several other states in formally legalizing the industry. In addition to Massachusetts, similar announcements have recently come out of Tennessee, Indiana and Virginia regarding implementation of new rules governing fantasy sports contests and operators. Other legislative initiatives are underway in statehouses across the country including, among others, Wisconsin, California and Florida. Fantasy sports contests and the laws and regulations that govern them, continue to grow and evolve. Accordingly, it is essential that fantasy sports enterprises keep abreast of the developing legal landscape. Operators should regularly review their respective contest platforms, entry fee and prize structures with knowledgeable counsel in order to effectively navigate this rapidly changing regulatory framework.