By: Commentary: April 7, 2016
In state legislatures across the country, bills are moving to establish and clarify consumer protection standards for fantasy sports. The overwhelming majority of these efforts will ensure millions of fans can continue to play fantasy sports, install sensible oversight to protect players and help a growing industry continue to create new businesses and jobs. Unfortunately, Maryland is going in the opposite direction.
A little history. Sports fans have been playing fantasy sports for decades, and recently the Internet and mobile technology have catalyzed a boom in fantasy play. In just the past 10 years, the number of players has risen from 20 million to 50 million. Fantasy sports now dominate conversations in sports media and is a common way friends stay connected, talking endlessly about tough losses, great sleeper picks and the strategy they have been working on for the next game.
The fantasy boom has spurred a new industry with high-tech data and analytics companies popping up in Massachusetts, Minneapolis, New York, San Francisco and more. Blue-chip investors like billionaire Dallas Mavericks owner Mark Cuban are backing them, and they are creating jobs and generating needed economic activity. Maryland should be a natural home for this growing industry.
But unfortunately, there are bills moving in the legislature that could shut out nearly 1 million Marylanders from the fantasy games they love to play and eliminate Maryland’s chance to take advantage of a growing economic opportunity.
A better-developed plan needs to prevail. In fact, legitimate questions about fantasy sports have been raised. As with any relatively new and high-growth industry, questions should be asked and adjustments should be made to ensure the millions involved are being treated fairly.
Neighboring Virginia recently took a thoughtful, effective approach to tackling this issue, passing a bill that has been signed into law by Gov. Terry McAuliffe that makes sure Virginians can continue to play fantasy sports while installing important parameters for fantasy sports companies. The new regulations ensure that players are protected and that the games are fair, including:
- verifying players are 18 or older;
- protecting confidential information affecting fantasy games;
- preventing fantasy company employees from competing in any fantasy contest;
- requiring players, coaches and team personnel in real-life sporting events to be restricted from play and;
- submitting to state regulators an independent audit verifying compliance with these requirements.
Many other states are taking a similar approach. Indiana recently passed a similar law, and positive fantasy sports legislation has passed legislative bodies in California, Tennessee Vermont, and West Virginia. More than 20 states are currently considering sensible fantasy sports legislation.
In fact, Maryland used to be a leader in this area with a bill passing – by overwhelming majorities – in 2012 that clarified all fantasy sports are legal in the state.
I served as director of the Maryland Lottery and Gaming Control Agency from 2010-2015 and oversaw Maryland’s expansion into casino gaming. During that time, the state put together thoughtful, risk-based analysis to create the appropriate regulation to ensure security, transparency and fair play at the state’s casinos.
Fantasy sports demands the same careful efforts given the hundreds of thousands in this state who enjoy participating in this form of entertainment. Efforts to turn back the clock are unsound and only will drive players to black-market operators who would care nothing about consumer protection. Additionally, the state would miss out on potential job creation opportunities and tax revenues.
Fantasy sports have become a revelation in sports entertainment, and other states are taking advantage. If the legislature tries to stop the tides from coming in, Maryland is going to miss a major opportunity.
Stephen Martino is a partner at the law firm Duane Morris LLP and is the regulatory compliance adviser to FanDuel. He previously served as director of the Maryland Lottery and Gaming Control Agency.
See more here.