Maryland DFS Regulations Enacted



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I still don’t exactly get why daily fantasy sports is so much more acceptable to lawmakers than online poker (well, I do, but I am going to remain indignant about it), but hey, at least daily fantasy sports is gaining legal traction in the U.S. Some form of online gambling might as well. On Tuesday, the Maryland Comptroller’s office (a fun change of pace from the usual Attorney General’s office) announced that daily fantasy sports regulations have gone into effect, though such games have officially been legal since 2012.

“Daily online fantasy sports games have a significant presence in Maryland,” Maryland Comptroller Peter Franchot said in Tuesday’s press release. “It is entirely appropriate that we enforce basic rules to ensure the games are fair, anti-competitive abuses are declared out of bounds, and appropriate taxes are paid.”

The new regulations essentially mimic those of other states and include:

•    Players must be at least 18-years old
•    Professional athletes may not participate in contests involving their own sport
•    Employees, directors, or contractors (and their immediate families) may not play
•    Scripts are not allowed
•    $1,000 maximum deposit per month per customer; customers may have their limits raised on a case-by-case basis, but must “certify” that they have the financial means to handle losses
•    Operators are not allowed to extend credit to players
•    Player funds must be segregated from operating funds and all prizes must be able to be covered
•    Operators must identify “highly experienced” players in the lobby

Interestingly, in contrast to other states, daily fantasy sports operators do not need to register with the state or pay any special DFS licensing fees or taxes. Operators still must pay taxes, but nothing specific to DFS. The regulations simply state that operators “shall comply with all applicable tax laws and regulations.”

Though the legislation that the Maryland General Assembly passed in 2012 said that real money fantasy sports were not considered gambling, Maryland Senate President Mike Miller wrote to the Attorney General’s office a year ago, asking for clarification as to whether or not DFS was really legal, since DFS was not much of a factor at that point.

After analysis, Attorney General Brian Frosh responded, in part:

The question triggers a complicated analysis of the nature and scope of gambling exemptions contained in the Maryland Constitution; the differences between Traditional Fantasy Sports and Daily Fantasy Sports and their evolution over time; and definitions of gambling and commercial gaming that are not found in Maryland law or court precedent.

We have ultimately concluded that the 2012 law should have been the subject of a referendum, but acknowledge that there are legitimate counter-arguments and that it is unclear how a court would rule if asked to address the matter. As such, we believe that the General Assembly should take up this issue to make legislative intentions known and to clear up ambiguity.

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