Maryland State Comptroller Peter Franchot has proposed regulations for the daily fantasy sports industry that would ban individuals younger than 18 from joining commercial leagues, limit participants to ,000 in monthly deposits to their player accounts and bar operators from extending credit to members.
Publicized as a player protection measure, the new rules also would require operators to comply with tax laws and notify participants of their potential tax obligations.
“Lawmakers and law enforcement officials can continue to discuss issues, but we need some rules in place for the benefit of Maryland consumers,” Franchot said.
Those rules would prohibit companies from mixing participants’ funds with their business operating funds; ban games that involve amateur or college sports; bar individuals from using computer programs that could provide an unfair advantage by analyzing player-performance data and picking rosters; forbid company employees from playing; and require operators to establish reserve funds to ensure they can pay all prizes offered to winners.
The measures would not affect non-commercial fantasy-sports leagues such as those run by Yahoo and ESPN, which take place over an entire season and typically involve casual competition between friends and co-workers.
News reports say the regulations will take effect sometime this fall after a public comment period and review by the state legislature’s Joint Committee on Administrative, Executive and Legislative Review, which could ask for some revisions.
The rapid growth of daily fantasy sports games has prompted states across the country to examine whether the activity is legal in their jurisdictions.
In March, Virginia became the first state to approve legislation regulating the industry.
Attorneys general in Alabama, Florida, Hawaii, Illinois, New York, Texas and Vermont have said the daily versions are illegal, while other states such as Arizona, Iowa and Nevada have laws that prohibit the activity or require licensure as a form of gaming, according to an ESPN report this month.
Maryland is one of 11 states that allow daily fantasy sports, including Colorado, Massachusetts, Mississippi and Tennessee; however, questions have emerged about whether daily games are more aligned with gambling than traditional fantasy sports, because they involve frequent payouts. If so, they would amount to an expansion of commercial gambling and would require a voter referendum under the state Constitution.
