Maryland created laws that gave sports fans the freedom to take part in fantasy sports contests that last throughout a season. But the fantasy sports industry has changed so much over the years that Maryland lawmakers are wondering if they ought to revise their laws.
Comptroller Peter Franchot wants to know if the laws really protect consumers from “potentially detrimental industry practices.”
He is going to establish a panel to identify legal loopholes, and the Joint Committee on Gaming Oversight has scheduled a hearing for the next month.
Several state legislators are trying to determine if the state’s laws of 2012 need to be revised. They are concerned over the fact that the fantasy sports industry has changed greatly. Originally, it was just a way for family members and friends to take part in contests over a weeks and months. But today, it has evolved into a multibillion-dollar and highly competitive industry that enjoys the support of not only fantasy players, but also professional sports leagues and media companies. DraftKings and FanDuel say that they have 2.5 million and 5 million players, respectively.
John Olszewski Jr., who had sponsored Maryland’s law of 2012, said:
You still want people to have the independence and ability to participate, but we need to make sure it’s safe and that it’s fair. I don’t think anyone even back in 2012 envisioned the evolution we’ve seen. We’re not talking about friends and family leagues anymore.
Eric Luedtke, who had played a major role in shaping the 2012 law and currently chairs the joint gaming committee, says that he is bothered about the “massive advertising” on the part of DraftKings and FanDuel.
Currently, both FanDuel and DraftKings are locked in a legal battle with New York State. Eric Schneiderman, the attorney general of New York State, has demanded that the two fantasy sports websites stop accepting illegal bets. But the companies argue that they are operating legally.
Other US states have also joined New York State. Maura Healey, the attorney general of Massachusetts, has proposed a law to prevent people under the age of 21 from taking part in paid fantasy sports contests and to limit player deposits at fantasy sports websites. Nevada now requires fantasy sports websites to get hold a gambling license if they want to remain in operation.
Court documents show that DraftKings has signed financial deals with Major League Baseball (MLB), Fox Sports, and owners of NFL teams such as Dallas Cowboys and New England Patriots. FanDuel has investors such as NBC Sports Ventures, National Basketball Association (NBA), and Comcast Ventures.
Franchot intends to call a meeting to discuss the fantasy sports issues. Brian E. Frosh, the attorney general, Governor Larry Hogan, and representatives of the Maryland Lottery and Gaming Control Agency are expected to attend. He wants to ensure
that these gaming companies are operating legally, that taxes are being properly collected, and that Maryland consumers are protected from any potentially detrimental industry practices.
In Maryland, the comptroller has the authority to regulate fantasy sports. But Luedtke says that lawmakers are weighing the pros and cons of transferring this authority to the Maryland Lottery and Gaming Control Agency.
Responding to Maryland’s regulatory concerns, FanDuel said that CEO Nigel Eccles had recently written an open letter in support of “a number of smart, but tough proposals in various state legislatures” for the regulation of fantasy sports.
DraftKings said through its spokesperson that it has
always operated on the understanding that all of our games are legal in the states in which we operate. We remain committed to working with all relevant authorities to ensure that our industry operates in a manner that is transparent and fair for all consumers.
