Daily Fantasy Sports Legality in Md. May Be Determined by Referendum in Nov. Election - Southern Maryland Headline News

Daily Fantasy Sports Legality in Md. May Be Determined by Referendum in Nov. Election



ANNAPOLIS (March 31, 2016)—As the popularity of daily fantasy sports has risen in recent years, thanks to the success of companies like DraftKings and FanDuel, there is a chance that Marylanders would get the opportunity to decide for themselves whether the online sports competition should officially be considered legal in the state.

Senate President Thomas V. Mike Miller Jr., D-Calvert, and Sen. Douglas Peters, D-Prince George's, are sponsors of two separate bills that together would allow the Maryland Lottery and Gaming Control Commission to regulate daily fantasy sports throughout the state, or ban it outright. Both bills passed unanimously in the state Senate on March 23. They will then need to be approved by a House committee, followed by the full House, in order to become law.

Peters's bill would send the issue of whether daily fantasy sports should be regulated to a referendum in November's General Election. It is scheduled to be heard in the House Rules and Executive Nominations Committee on Friday at 3 p.m. in the Prince George's County delegation room.

Meanwhile, Miller's bill would present a different option altogether for the General Assembly. It would label daily fantasy sports betting as illegal, outside of small social groups, unless voters again decide to legalize daily fantasy sports in November through Peters' bill. It was sent to the House Ways and Means committee, but a hearing hadn't been scheduled as of Thursday afternoon.

"This legislation puts power of the decision on the hands of voters," Peters said.

In January, Maryland Attorney General Brian Frosh sent an advisory opinion to Miller that said he wasn't sure daily sports were considered legal because they weren't included in a 2012 law that authorized betting on season-long fantasy sports held among a small group of friends or individuals.

Victoria Gruber, chief of staff to Miller, said that Frosh wanted the General Assembly to come up with legislation for daily fantasy sports that could be considered an expansion of commercial gaming.

Gruber also said that many of the daily fantasy sports companies that have lobbied in Annapolis wouldn't mind being regulated by the state. But they wouldn't want to be considered games of chance and end up being compared to casinos and horse racing.

At a Senate hearing for the bills in mid-March, representatives from DraftKings and FanDuel said that they wanted the competitions referred to as games of skill -- in part because of the amount of strategy and research needed to play daily fantasy sports, they said.

Unlike a traditional fantasy sports league that lasts for an entire sports season, daily fantasy sports contests are based on certain match-ups of a single game or day. A salary cap format is employed where users are given an imaginary budget to spend on athletes for their fantasy teams. If an athlete is one of the top performers at their position in their respective sport, they will be more expensive to purchase in daily fantasy.

The current market for daily fantasy sports is estimated to be around 3 million to 4 million players in the United States, according to The Maryland Center of Excellence on Problem Gambling.

Ryan Toohey, a spokesman for DraftKings, said that because players are assembling teams themselves, having skill is necessary to be good at daily fantasy sports.

"We disagree with the term 'Gaming'. When you assemble a team, you are serving as the General Manager to do all of the research of the players and match-ups. It's not a function of chance," Toohey said.

Toohey also said that there are 935,000 estimated fantasy sports players in Maryland for both daily and season long leagues.

DraftKings' Director of Public Affairs Griffin Finan said in a statement that the company does support appropriate regulation of daily fantasy sports contests to protect their consumers, but reiterated that they are games of skill.

"We are engaged in an active dialogue with legislators and other stakeholders across the country as well as in Maryland, where fantasy sports are explicitly exempted from gambling laws," Finan said, "This particular plan is not reflective of what we are hearing from fans, lawmakers and experts in state after state that fantasy sports are legal games of skill."

Since money has to be wagered more frequently for daily fantasy leagues and contests, there is more of a concern about the risk of betting and developing a gambling addiction than with traditional fantasy leagues.

Dr. Lori Rugle, program director for The Maryland Center of Excellence on Problem Gambling said that she thinks daily fantasy sports meet a more similar criteria to gambling compared to traditional fantasy leagues because they can be seen by people as more of a way to make money than just for recreational use.

"Spending more time scoping out players, joining multiple leagues...it takes up more time and money and you're also risking money and value to an unknown outcome." Rugle said.

If Peters' bill passes and voters choose to legalize daily fantasy sports, only individuals who are 21 or older could play in Maryland. Rugle said that the age limit is important when establishing regulations and responsible practices because minors would be better protected.

"25 is typically the age where the judgment parts of the brain are fully matured. The longer you can keep someone from being engaged in gambling, the less likely they are to develop a gambling problem," Rugle said.

Even though The Maryland Center of Excellence on Problem Gambling hasn't had any documented clients seeking help for addiction specifically related to daily fantasy sports, Rugle said that cases are beginning to be reported around the country. She also said they are finding, through help line calls and other data, that individuals on average report recognizing gambling issues for 2 to 5 years before seeking out help.

The fiscal summary of Peters' bill states that if it is approved at referendum, an indeterminate amount of general fund revenues would increase beginning in the 2017 fiscal year and the State Lottery and Gaming Control Commission would have to collect annual regulatory fees for each individual who licenses a daily fantasy sports game for registered players in Maryland.

The fiscal summary doesn't state what specific amount of funds would be generated at the state level and Maryland wouldn't see any of the revenue until January 2017.

Meanwhile, Miller's bill would present a different option altogether for the General Assembly. It would label daily fantasy sports betting as being illegal, outside of small social groups, unless voters again decide to legalize daily fantasy sports in November through Peters' bill.

Maryland would potentially become one of the first states in the country to regulate fantasy gaming sports. On March 7, Virginia became the first state to regulate daily fantasy sports when Gov. Terry McAuliffe signed a bill that would require sites like DraftKings and FanDuel to pay a $50,000 registration fee and submit to regular outside audits.

Maryland would also be the first state in the country to allow voters to decide whether to have the state regulate daily fantasy sports. Currently, six states have outlawed daily fantasy sports, including Arizona, Iowa, Montana, Louisiana, Nevada, and Washington, according to Legal Sports Report, a website geared toward coverage of daily fantasy sports and sports betting.

Both of the bills have now moved on to the House of Delegates and were introduced by the House on March 24 during the morning legislative session. Peters' bill is scheduled to be heard first on Friday by the House Rules and Executive Nominations committee at 3 p.m. in the Prince George's County delegation room.

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