The fantasy sports business, led by DraftKings and FanDuel, has drawn increasing regulatory scrutiny over the past few weeks with state regulatory officials debating whether the paid daily games are gambling.
"These are games that you carry around with you in your pocket and lose money at the touch of a button," said Healey, who served as co-captain of Harvard's basketball team and went on to play two years of professional basketball in Europe. "This is an important step to protect consumers here in Massachusetts."
The proposals must be submitted to the secretary of state and will be subject to a public comment period before taking effect.
Massachusetts' approach is more restrained than that taken by New York, whose attorney general on Tuesday sought a court injunction to shut down DraftKings and FanDuel, calling the games "plainly illegal."
Healey said it is unclear whether the contests are illegal under state law and noted that other state authorities, including the legislature or gaming commission, could take other steps to rein in the games in Massachusetts. The state has the ninth-largest population of fantasy sports players, according to a survey by Eilers Research.
A spokesman for Boston-based DraftKings called the steps "thoughtful and comprehensive" and said the company would immediately begin taking steps to comply with the proposed rules.
"We appreciate that, in addition to Attorney General Healey, a number of state regulators and other authorities are taking a reasoned approach to the Fantasy Sports industry that considers the interests of sports fans," DraftKings said in a statement.
FanDuel did not immediately respond to a requests for comment.
Modern fantasy sports started in 1980 and have mushroomed online. Participants typically create teams that span an entire season in professional sports, including American football, baseball, basketball and hockey.
Daily fantasy sports, a turbocharged version of the season-long game, have developed over the past decade. Players draft teams in games played in just one evening or over a weekend.
Healey, a Democrat, and Massachusetts Governor Charlie Baker, a Republican, have differed on whether the games are gambling or contests of skill. Baker last week said he played a free version of a DraftKings game on his cell phone and concluded it was a game of skill.
Nevada, home to the United States' gambling capital Las Vegas, last month ordered fantasy sports operations to cease operating in the state, determining that they were unlicensed gambling.