Fantasy sports come to grips with reality

The argument over whether playing fantasy sports for money is legal is long-past settled. Congress, under heavy lobbying from professional sports leagues, gave a specific carve-out for fantasy leagues to operate when it passed the Internet Gaming Act in 2006.

And there is also little debate that fantasy sports is real gambling, pure and simple, especially with the proliferation of sites such as Boston-based DraftKings and its rival FanDuel that promise daily riches to players who use their interest in sports and play from behind the comfort of their computers at home or at work.

But now the multibillion-dollar industry is faced with a two-pronged attack that could rock its foundation at the core: Is it on the level and does it need regulation?

While fantasy sites will have little to say about the answer to the second question, it’s the first one that could spell trouble. Gambling, legal or illegal, can only thrive if players think they have the same shot of winning as everyone else. It’s why horse racing has such strict rules and oversight and why the 1919 Black Sox scandal nearly destroyed baseball.

The problems for fantasy sites emerged this week when reports surfaced that Ethan Haskell, a DraftKings employee, won $350,000 on FanDuel. Questions immediately rose on whether Haskell used inside information not normally available to regular players, especially after it was learned the mid-level content manager released proprietary information before its scheduled time.

Blowback was swift and fierce, prompting DraftKings and FanDuel to issue an unusual joint press release to try to quell the controversy. DraftKings CEO Jason Robins told the Globe that he won’t fire Haskell and offered proof that his employee didn’t profit from inside information.

Both DraftKings and FanDuel have ties with professional sports leagues and sports networks and those partners tried to distance themselves quickly. Major League Baseball and the National Football League, which bar their players from participating in fantasy sports for money even as the two leagues invest in the businesses, were shocked, shocked, I tell you, that fantasy sports employees are allowed to play. Both FanDuel and DraftKings prohibited their workers from playing on their own sites but there was no ban on playing on rival sites.

Though that reality came as news to many, the businesses were built and stocked with people who play the games and therefore had the most skills in running such operations. Nevertheless, both sites have implemented a ban on employees playing fantasy sports for money anywhere and DraftKings has hired Greenberg Traurig to examine its internal workings. The companies have tried to downplay the impact, with FanDuel pointing out that fantasy site employees won one-third of 1 percent of all money awarded. But with more than $2 billion paid out since its launch, that’s about $6 million, not exactly chump change.

But the bigger threat on the horizon is the possibility of not only regulations that could restrict how the sites are played but the entry of competition in the form of state-sponsored fantasy sports. Federal law permits sports betting in four states — Nevada, Delaware, Oregon, and Montana — although only the first two have active betting. New Jersey tried to allow legalized gambling as a way to bolster state revenues, but a court ruling deflated any attempt by other states to enter the fray.

But with the fantasy carve-out from Congress and the template for success from the online sites, Massachusetts State Treasurer Deb Goldberg has already begun floating the idea that the Bay State should get in the game by having the Lottery run a fantasy sports game. It’s a move that other states with successful lotteries are sure to embrace, given the billions available and, at least from a bettor’s standpoint, the imprimatur of government that the game is on the up and up.

Gov. Charlie Baker is already on the record as being cool to the idea and several lawmakers have given it the thumbs down as well. But with casino gambling on the horizon and the need for revenues continuing unabated, coupled with the distaste for new taxes, don’t bet against it.

JACK SULLIVAN

 

BEACON HILL

A Salem News editorial opposes proposed legislation that would ban the use of cellphones while driving. Globe columnist Yvonne Abraham gives it a hearty endorsement.

State officials hold a groundbreaking for a new visitors center at Walden Pond that has been decades in the making. (Metrowest Daily News)

Attorney General Maura Healey defends the Teamsters union, several members of which face federal indictments on extortion charges. (Boston Globe)

The House passes legislation making Fentanyl trafficking illegal. (Masslive)

MUNICIPAL MATTERS

The Walsh administration goes to the New York Times to announce a new digital initiative that will measure the city’s performance on a number of metrics and present them in a single number for residents to gauge.

The Globe reports that, a year after Boston closed its main shelter, “gaping holes remain in the city’s social safety net.”

The bid to recall Lawrence Mayor Daniel Rivera from office bogs down in procedural fights, as the Board of Registrars goes to court to fight an earlier injunction won by Rivera. (Eagle-Tribune)

A state ethics law that bars officials from collecting more than one paycheck from a municipality is creating problems in New Bedford where one city councilor and a former councilor running for School Committee have worked at the vocational high school while sitting on the City Council. (Standard-Times)

The ever-squirrely Boston City Council may settle on a new tack in its bid for a pay raise: If the council simply takes no action on a proposal submitted by Mayor Marty Walsh for a 14 percent raise it will become law after 60 days without any councilor having to take a vote on the matter. (Boston Globe)

Firefighters in Bourne have received layoff notices in the wake of a defeated override that failed by 34 votes. (Cape Cod Times)

CASINOS

A Globe editorial offers a blistering condemnation of Boston Mayor Marty Walsh‘s legal efforts to stymie an Everett casino, saying he’s wasting taxpayer money on a fool’s errand and pointing out more than once that he voted as a state lawmaker for the legislation that severely limits the power of communities that are near, but not actual hosts to, casinos. For good measure, the paper tells Steve Wynn to abandon his libel lawsuit, filed earlier this week, too.

Walsh has been polling residents on his handling of the casino issue, and so far his support remains strong. (Politico)

WASHINGTON/NATIONAL/INTERNATIONAL

Tom Keane offers a very interesting take on why Washington should go see The Martian starring Matt Damon. (WBUR)

Chris Burns, an assistant men’s basketball coach at Bryant College in Smithfield, Rhode Island, becomes the first openly gay coach among the more than 3,000 Division 1 coaches in the country. (USA Today)

House Republicans today are scheduled to pick their nominee to replace Speaker John Boehner for the floor vote at the end of the month but there is doubt the fractured caucus can rally around one nominee. (U.S. News & World Report)

Governing explores how 12 newbie governors are doing and finds seven are doing well, three are a mixed bag, and two are struggling. Gov. Charlie Baker falls in the first category.

ELECTIONS

Hillary Clinton has broken with President Obama and declared her opposition to the controversial Trans-Pacific Partnership trade pact. (New York Times)

BUSINESS/ECONOMY

Dell is in advanced talks to buy local giant EMC Corp. (Boston Globe)

General Electric is moving a $1 billion division to Massachusetts, and the state could be in the competition for the company’s corporate headquarters. (Boston Globe)

Retail behemoth Amazon is challenging the online niche seller Etsy by launching an arts and crafts marketplace for handmade goods. (New York Times)

Luxury condos could be coming to the waterfront Port Norfolk neighborhood of Dorchester. (Dorchester Reporter)

EDUCATION

A new enrollment plan that would create a single registration form for district and charter schools in Boston is stirring concern. (Boston Globe)

The Mashpee School Committee has launched an investigation into a woman’s claim that the superintendent forced his way into her home looking for evidence that her daughter, who recently enrolled in the schools, did not live there. (Cape Cod Times)

Brockton has reinstated sports programs at the city’s middle schools after budget cuts forced a halt to them last year. (The Enterprise)

Lowell Superintendent Salah Khalfaoui appoints a five-member panel to review the department’s handling of a racial incident that resulted in the suspension of six students. (The Sun)

A prison-based team of inmates schooled a Harvard team in a debate tournament. (Washington Post)

HEALTH/HEALTH CARE

A nonprofit group looking to develop a medical marijuana cultivation site in Westfield has applied to open up dispensaries in Fitchburg and Lee. (Berkshire Eagle)

TRANSPORTATION

The MBTA announces nonstop commuter rail trips between Boston and Worcester. (WBUR)

A Boston Herald editorial supports ending the ban on alcohol ads on the MBTA.

ENERGY/ENVIRONMENT

Officials at Pilgrim nuclear power plant admitted they never addressed safety concerns at the Plymouth facility cited in a government advisory in 1992 and have instituted fire watches until they determine what can be done. (Cape Cod Times)

Westport has agreed to a lease with a private firm to build a solar array on its capped landfill. (Herald News)

CRIMINAL JUSTICE

Hampden District Attorney Anthony Gulluni railed against a District Court judge allowing an accused two-time shooter out of jail on low bail, the latest official to be frustrated with accused violent defendants being released back onto the Springfield and Holyoke streets. (The Republican)

A Randolph woman has been charged with stealing more than $280,000 from a family that she worked for as a nanny. (Boston Herald)

MEDIA

The New York Times aims to double its digital subscription revenue to $800 million by 2020. (Nieman Journalism Lab)

The Los Angeles Times explains why it’s exploring online polling.

Gannett is preparing to pay $280 million to buy the Journal Media Group, which owns the Milwaukee Journal Sentinel, the Commercial Appeal of Memphis, and a host of other publications. (USA Today)