Daily fantasy sports is a game of chance, says the latest report by the Massachusetts' commission, which sets a legal precedent in the midst of the expansion DFS is seeing across the country.
Not long ago, the Bay State considered DFS to be a game of skill and led the way in introducing legislation that considered DFS as such.
However, the Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports, appointed by the State to review legal approaches to the DFS sector, published a report classifying DFS as a game of chance.
If It Looks Like a Duck, It Must Be a Duck
In practice, this means DFS is regarded as online gaming and is therefore subject to online gambling legislation, which is yet to be introduced in Massachusetts.
The chairman of the commission, Steve Crosby said it was clear DFS was gambling and that the report simply stated the obvious truth.
The report of the Special Commission also suggests the looks of the future online gaming legislation, which would introduce heavier taxes for DFS operators, and would require them to obtain a license to operate.
If this report gets adopted by the State's legislature, it would alter the situation in the sector, which would especially affect two biggest DFS operators, Massachusetts-headquartered DraftKings, and FanDuel.
Some states strongly opposed exempting DFS from gambling legislation, but so far all existing laws refer to it as a game of skill.
Director of public affairs at DraftKings, James Chisholm, said words and definitions matter when it comes to their line of business.
Some of the US largest states, such as California, Florida, Texas, Pennsylvania and Illinois are yet to deliver their opinion on the matter, but the precedent set in Massachusetts could open Pandora's box and have a devastating effect on the entire sector.
Since the introduction of betting legislation across the United States is imminent, DFS could lose much of its high-profile financiers, which could in turn influence not only the growth in this business but also its market potential.