Prepared Written Statement of John T. Holden & Ryan M. Rodenberg for the Massachusetts Special Legislative Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports
10 Pages Posted: 1 May 2017
Date Written: May 2, 2017
Online gaming has existed in some form for slightly more than 20 years. The growth and popularity of online gaming can be partially credited to three important events:
1) in 1995, Microgaming was the first to pioneer and disseminate online gaming software;
2) software was introduced that allowed for the secure transfer of funds over the internet; and
3) the acceptance of a wager online by InterCasino, which was based in Antigua.
Shortly after the emergence of online gaming sites abroad, Congress began to express concern over Americans accessing virtual casinos and sportsbooks. Early congressional concerns centered on underage access, pervasiveness of illicit material, anonymity, and the integrity of online gambling operators. Many of these concerns persist today. These issues, in addition to concerns about the integrity surrounding real-world sporting events and video game competitions (i.e. esports), should be at the forefront of the minds of state and federal legislators when developing new gaming legislation.
The rise of daily fantasy sports (“DFS”) and traditional fantasy sports has demonstrated that many Americans have an interest in some forms of sports gambling. Interest in fantasy sports is dwarfed by the popularity of other forms of betting, as evidenced by the estimated $10.4 billion wagered on single events like the NCAA Men’s Basketball tournament and $4.7 billion wagered on the 2017 Super Bowl. Americans are already betting on sports. Many are betting on sports through DFS contests, others are betting at Nevada sportsbooks, some are betting with neighborhood bookies, but the vast majority are betting online in a grey market. Efforts to stop or curb online sports gambling have failed. There is a need to develop a more effective and efficient plan to implement a regulatory system that protects customers, and operators.
Within this statement we address four important considerations for the regulation of DFS and online gaming moving forward:
1) federal law;
2) state law;
3) virtual currencies; and
4) consumer protections.
Keywords: online gaming, esports, esports gaming, daily fantasy sports
JEL Classification: K00, K10, K11, K19, K20, K23, K29, K30, K39, K40, K49, L50, L59, L80, L83, L89, O34
Suggested Citation: Suggested Citation