Industry Updates

Maryland Lawmakers Introduce DFS Bills

Last week, lawmakers in Maryland introduced a pair of bills to the house and senate seeking to legalize and regulate daily fantasy sports in the Old Line State. The move comes about a month after Maryland’s Attorney General opined the need for the legislature to address daily fantasy sports.

Last month’s letter noted that a 2012 bill clarified the legality of traditional season-long fantasy contests, but did not properly address daily fantasy contests such as those offered by FanDuel and DraftKings. The letter noted that traditional season long contests are frequently played among friends and associates while daily fantasy contests are commercial enterprises that allow hundreds of thousands of players to compete anonymously over the internet in one-day contests.

The letter also noted that a 2012 law effectively exempted daily fantasy sports as a commercial enterprise and “thus should have been subject to referendum under Maryland Constitution Article XIX.”

Lawmakers took note and have since introduced two bills that seek to address the specific matter of daily fantasy sports.

Senate Bill 976

SB 976 was introduced and first read on February 11th of 2016. The bill seeks to authorize and regulate commercial daily fantasy sports. More specifically, the bill seeks to:

  1. Require the State Lottery and Gaming Control Commission to regulate the operation of online daily fantasy sports games
  2. Require a license for the operators of DFS sites
  3. Establish a licensing fee for DFS operators
  4. Require the State Lottery and Gaming Control Commission to conduct investigations and ensure that operators comply with all rules

The bill would also require DFS operators to:

  1. Hold the funds of registered players in trust
  2. Prevent players from registering more than one account
  3. Comply with certain advertising conditions
  4. Verify customers’ identities and eligibility to participate in contests
  5. Verify that all customers are at least 21 years of age
  6. Take certain actions to “identify certain experienced players and inexperienced players”
  7. Facilitate the collection of state income tax from registered players
  8. Protect confidential information

Other text in the bills goes on to use the usual UIGEA-compliant definition of fantasy sports contests. That is, contests must cover more than one individual or contest, that prizes be made known in advance and that prizes may not be based the number of paid entrants. This is the standard definition of legal fantasy contests that sites already implement as it is. Existing providers should have no trouble meeting those requirements.

House Bill 930

HB 930 was introduced on February 10th and simply seeks to “transfer the authority to adopt certain regulations relating to fantasy competitions from the Comptroller to the Director of the Lottery and Gaming Control Agency; and generally relating to fantasy competitions.”

This bill also reiterates the UIGEA-compliant definition of fantasy sports contests for the purposes of explaining exactly what the Lottery and Gaming Control Agency is expected to oversee. In other words, HB 930’s primary purpose is to give the agency regulatory authority over daily fantasy sports in Maryland.

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