Maryland Fantasy Sports Law, Take Two: New Legislation Introduced After AG Opinion

Posted on February 12, 2016 - Last Updated on February 14, 2016
Posted By on February 12, 2016
Last Updated on February 14, 2016

Maryland joined a variety of other states in introducing daily fantasy sports legislation this week. The only difference between Maryland and other states? The state already passed a fantasy sports bill, back in 2012.

The bills — SB976 and HB930 — were introduced within a day of each other.

Why the new Maryland DFS effort?

The legislation came just a month after an opinion from the attorney general’s office suggested that the state legislature take up the matter.

In the advisory opinion, the office of AG Brian Frosh wondered aloud if the law exempting DFS from state gambling law should have gone to referendum. As a result, the opinion stated the legislature should take up the matter again, four years later.

However, due to the substantial uncertainty surrounding these issues and because the legislative history surrounding Chapter 346 suggests that the General Assembly did not focus on the regulation of daily fantasy sports in 2012, and could not realistically have considered daily fantasy sports as they exist today, we recommend that the Legislature squarely take up the issue this session and clarify whether daily fantasy sports are authorized in Maryland.

The Senate version of the bill makes an allowance for the bill to go to referendum, if passed.

Along with Kansas, Maryland is one of only two states that had previously passed bills dealing expressly with fantasy sports. That effort, while seemingly providing legal clarity at the time, will apparently be revisited now.

A closer look at the Maryland DFS bills

The bills in some ways take their cues from a lot of other regulatory efforts already introduced in other states — more than a third of all states have active efforts. And the two bills, themselves, are also very different from each other.

The House version is a short, straightforward bill that puts the Lottery and Gaming Control Agency in charge of promulgating regulations of fantasy sports. Few bills elsewhere take this approach.

The Senate version differs from both the House version and efforts elsewhere while sharing some similarities with widespread regulatory efforts. For example:

  • The bill sets up a licensing structure that also requires background checks of operators, and a to be determined fee.
  • DFS operators must segregate player funds in a trust.
  • Operators must provide for security of data as it relates to gameplay.
  • Operators must implement ways of preventing players from using the platform in locations where DFS is illegal.
  • Civil penalties can be created for violating the law.
  • Play by DFS employees is prohibited.

Some differences in this bill from others are probably not welcomed by the fantasy sports industry. Namely:

  • The bill would put the industry under the purview of the State Lottery and Gaming Control Commission (with the assistance of the Lottery and Gaming Control Agency). Putting DFS under the authority of a gaming commission is something that the industry has tried to avoid.
  • The minimum age to play DFS is 21. Most bills put the age at 18, which is the current industry standard.

The background of DFS discussion in Maryland

Public officials have been discussing the issue for several months now, although the legislature is acting — at least publicly — for the first time now.

Last month, on the heels of the AG opinion, Maryland Senate President Mike Miller told the Baltimore Sun:

“Somebody needs to take action. I think it’s up to the industry to say, ‘We’re going to clean up our act, and we need to be legal and propose legislation to make that happen.’ “

The industry has been lobbying in the state capitol, per reports. Back in December, the Washington Post reported on conversations held among the offices of State Comptroller Peter Franchot, Gov. Larry Hogan and Frosh.

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Dustin Gouker

Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.

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