Maryland could be first to hold referendum on fantasy sports

Stephan Savoia / AP

In this Wednesday, Sept. 9, 2015, photo, an employee in the software development department of DraftKings, a daily fantasy sports company, walks past screens displaying the company’s online system stats in Boston.

ANNAPOLIS, Md. — Maryland would become the first state to let voters decide whether the popular but controversial phenomenon of Internet fantasy sports betting is fully legal, under a bill now pending in the legislature.

But if the House of Delegates decides not to put the matter to referendum — or if the referendum happens and voters say no — another pending bill would explicitly ban the practice, which has been debated all over the country. Nearly 30 legislatures are considering proposals to regulate, ban or affirm fantasy sports betting.

One Maryland measure would ask voters to decide in November whether to allow commercial daily fantasy sports betting. That would make Maryland the first state to put the legality of fantasy sports betting directly to the voters, according to the National Conference of State Legislatures.

The second bill would define daily fantasy sports betting as illegal, except in small social groups, unless voters say otherwise in a referendum.

State senators voted unanimously for both bills Wednesday, without debate. They now go to the House.

"We're giving two options to the House of Delegates," Senate President Thomas V. Mike Miller said after the votes.

Alexandra Hughes, chief of staff to House Speaker Michael Busch, wouldn't predict what the House will do, since the legislation originated in the Senate and the House hasn't had hearings on it yet.

A 2012 Maryland law authorized fantasy sports betting, but only in small social groups that play all season. It doesn't cover the daily betting offered by commercial companies like DraftKings and FanDuel that became popular after the law was enacted.

Maryland Attorney General Brian Frosh advised lawmakers earlier this year to clarify the law. Frosh's office noted commercial gambling expansion requires voter approval. That's due to a constitutional amendment allowing casino gambling that voters approved in 2008.

The measure putting the question on the Maryland ballot also would create regulations for an industry that currently has none in the state. For example, companies would have to apply for a license with the State Lottery and Gaming Control Commission, which would regulate the business. The commission also would have to create an application fee for the license. Players would have to be at least 21.

The companies contend fantasy sports are games of skill, exempt from gambling laws.

"We support thoughtful and appropriate regulation of our contests to protect consumers and ensure our players can enjoy the games they love," said Griffin Finan, a spokesman for DraftKings. "We are engaged in an active dialogue with legislators and other stakeholders across the country as well as Maryland, where fantasy sports are explicitly exempted from gambling laws."

In fantasy sports betting, people deposit money in accounts and create fantasy rosters by selecting real players. They then compete to win money against other contestants based on their players' performances.