Daily Fantasy Sports (DFS) failed to gain a clear legal status in the State of Maryland after lawmakers fails to see through, the passage of two bills in the state. With the legislature that closed on Monday, due to remain shut for a year, there have been pleas for bans and legal actions against DFS operators but the fate of the industry is still pretty much up in the air.
Two Senate bills SB 976 – Commercial Daily Fantasy Sports – Authorization and Regulation; sponsored by Senator Douglas Peters and SB 980 – Traditional Non-commercial Fantasy Competitions – Clarification; sponsored by Senator Thomas Miller, which passed through the senate, failed to secure a full vote for either of the two pieces of legislations.
Allowed but only if licensed?
Senate Bill SB 976 called for the regulation of the daily fantasy sports industry. The bill calls for regulations of DFS operators by the State Lottery and Gaming Control Commission; under which all internet sports fantasy games providers would need to acquire a license to offer their paid matches to the public. They would also be required to follow a code of conduct, which include rules such as an age restriction of 21 years for players who wish to participate in their tournaments and several others. The bill asked the question, whether regulation of DFS should be put up for a referendum.
Senate Bill SB 980 called for prohibition from “offering or participating in a commercial game or competition that includes the elements of consideration, chance and reward.” The bill also called for the state and local government to get involved to “narrowly construe sections of law that authorize specified types of gaming;” alterations would include alteration of the definition of some fantasy sports competitions under the regulation and specification of the State Lottery and Gaming Control Commission and much more. Under this bill, DFS can potentially face becoming banned, if voters do not approve the referendum.
Both bills were originally schedules to be considered in a hearing and voted on, last week but unfortunately neither were processed. One bill managed to pass by a 22-0 margin, on Monday but as they were never considered for a full vote, these results do not hold much connotation.
Seeing as the legislation called for a referendum of the voters, it could be more than a year until anything happens on DFS, legislatively.
The DFS industry is fighting the bills
The fantasy sports industry has been actively campaigning against both the bills, as the result, they might consider the delay to be a favourable move. The legislature will not meet again for another year; until later in 2017 and given how the bills call for a referendum of the voters, it could be more than a year until any legislative alterations can be made for the laws surrounding DFS.
A law passes in 2012 was considered to cover DFS. For a longest time, it was thought that the fantasy sports industry has legal clarity in Maryland. However, when the Attorney General for the state, Brian Frosh issued an advisory opinion on the subject of daily fantasy sports in January 2016, reasonable doubt about the legality of DFS in Maryland was raised. Frosh and his office suggested that the 2012 law “should have been subject to voter referendum because it is an expansion of commercial gaming in Maryland.” The bills were designs to attempt to answer Frosh’s question; however, the issue remains unresolved at the moment.
After the House failed to act, the president of the state Senate, Mike Miller, who is also the sponsor of the bill that called for the ban on DFS requested for the state’s attorney general to take legal action against the fantasy sports industry, especially targeting the larger operators, namely DraftKings and FanDuel. Miller refused to accept that the issue with DFS should simply be ignored; he said with regards to the lawsuit that he thinks Frosh should file against the fantasy sports operators, “I know he’s capable of handling it,” Miller said.
Miller has been very outspoken compared to his colleagues about the issue of legality surrounding DFS. He was also the one that had originally asked for the opinion from Frosh’s office.