With controversy, investigations and lawsuits mounting, embattled daily fantasy sports jackpot site DraftKings has added a major power player to its own lineup: former Massachusetts attorney general and Democratic gubernatorial candidate Martha Coakley. She'll work as a "special advisor" for Boston-based DraftKings as it navigates calls for regulation.
"I have great confidence in DraftKings’ commitment to operating with the highest standards and taking the necessary steps to ensure that sports fans who want to play these games are protected. DraftKings is committed to working cooperatively with all state regulators to implement policies that protect consumers,” said Coakley.
Coakley said she will use her experience to help the company implement “additional best practices designed to preserve the integrity of the game.”
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Regulating sites like DraftKings and FanDuel isn’t so simple.
"You're trying to fit a square peg into a round hole because the current Massachusetts law wasn't intended to deal with daily fantasy sports leagues," said Jonathan Silverstein, a Boston gambling law expert of Kopelman and Paige P.C.
Legislation may be required to outline out how the Gaming Commission would background-check and tax these sites.
"The question is going to be does the Legislature want to create a tailored approach to regulate these types of activities? And I think the answer should be 'yes,' " said Silverstein, whose firm has represented several Bay State municipalities in their negotiations with casino applicants.
There’s a growing consensus — from Massachusetts Governor Charlie Baker to New England Patriots president Jonathan Kraft — that daily fantasy jackpot sites like DraftKings and FanDuel need to be regulated and licensed.
If Massachusetts regulated and taxed fantasy sports like casinos, that would mean aggressive background checks of company executives -- and a 25 to 49 percent tax on their profits.
"You could anticipate that it's going to be somewhere in that similar range, in order for similar industries to be regulated in a similar way," Silverstein said.
Last Sunday's players' fees — or wagers — were down from a week earlier at both sites, 9 percent at DraftKings and 3 percent at FanDuel. And this Sunday's top payouts will be down by $1 million at both sites from last week: $6 million at DraftKings, $4 million at FanDuel.