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DraftKings, FanDuel settle with Massachusetts for $1.3M apiece

Daily fantasy sports operators DraftKings and FanDuel will pay $2.6 million in a settlement with the Massachusetts Attorney General's office as a result of an investigation into allegations of unfair and deceptive practices by the companies prior to 2016.

Each company will pay $1.3 million in the settlement, which was announced Thursday.

"I am glad to have reached these settlements to address various consumer issues that existed at the early stages of this new industry," Massachusetts Attorney General Maura Healey said in news release. "We have since implemented a set of comprehensive regulations that provide consumers with broad-ranging protections and that have served as a model for many other states."

DraftKings and FanDuel are compliant with the current regulations, according to the news release.

Healey's office began investigating the companies' business models and operating practices in early 2015 and found that some participants were not adequately protected. In 2016, the attorney general's office implemented consumer protection regulations for the fantasy sports industry.

"We have worked closely with the Massachusetts Attorney General's Office in their review of fantasy sports, including their issuance of the first set of consumer protection regulations for our industry, which we were pleased to comply with since their inception in 2016, " FanDuel spokesperson Justine Sacco said in a statement.

"Over the last two years, the attorney general's office has done an excellent job of working to fully understand DraftKings, our business and the fantasy sports industry," Tim Parilla, DraftKings' general counsel, said in a statement. "That expertise informed the Massachusetts regulations which have now become the national model for common sense, consumer-focused fantasy sports regulations."

In October 2016, DraftKings and FanDuel reached separate $6 million settlements with New York Attorney General Eric Schneiderman to resolve lawsuits over alleged false and deceptive advertising practices.