Massachusetts may classify Fantasy Sports as online gaming

The panel, set up under a law that gave temporary legal status to the emerging industry, called on the Legislature to permanently legalise the games and consider additional oversight of their operations. But in its report on regulating online gaming, the commission also said the games should be subject to gaming rules.

DraftKings and others in the industry have fought to avoid that term, arguing that the games are based on skill, rather than luck. Players can pay to enter contests in which they select teams of athletes whose real-life performances determine the outcome.

The report, approved by a vote of 5-3 by the Legislature’s Special Commission on Online Gaming, Fantasy Sports Gaming, and Daily Fantasy Sports, said the distinction between luck and skill does not matter, and that any game with money on the line is gaming.

DraftKings and other industry executives argued the gaming label is more than semantics. Being treated as a gaming company could create tax liabilities for operators and raise concerns among their payment processors. They said it would also likely embolden the industry’s opponents in other states and at the federal level.

"The commission’s actions today, as we and our partners in the fantasy sports industry pointed out time and time again, could restrain our company’s ability to thrive and create jobs here in Massachusetts,” DraftKings director of public affairs James Chisholm said in a statement.