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Maryland Lottery and Gaming Control Agency Director Gordon Medenica (File The Daily Record/Bryan P. Sears)

Md. gaming director calls fantasy sports betting ‘a powder keg’

State officials, including the head of the state lottery and gaming agency, are casting a critical eye at the world of online fantasy football gaming.

Gordon Medenica called into question the legality of the industry in response to questions raised by Comptroller Peter V.R. Franchot at a Board of Public Works meeting Wednesday.

“I think it’s a clever attempt to get around the need for regulations,” said Medenica. “I think it’s a powder keg. Certainly within the gaming industry right now it’s probably topic No. 1.”

Chance are even if you’re not immersed in the world of fantasy football, someone you know is or you’ve seen the nearly constant advertisements for sites such as FanDuel and DraftKings, which hold daily and weekly tournaments in which players can win prizes valued at up to $2 million.

“It does appear to be just gambling,” said Lt. Gov. Boyd Rutherford. “It’s basically advertised as gambling.”

The comptroller called it “one half step away from the total corruption of sports” and questioned whether the sites were ensuring taxes are withheld from Maryland winners the same way that casinos and the lottery agency does.

“Is this all just on the honor system?” Franchot asked.

The comptroller asked Medenica “to prepare something, since you are very knowledgeable, that outlines some of the issues.”

The sites have come under some scrutiny when it was reported this week that an employee of FanDuel used a proprietary report showing which players are most often drafted to draft teams on DraftKings. The employee reportedly won $350,000 using the data.

Fantasy football is legal at the federal level and in Maryland.

“(In) 2006 federal legislation carved out space for fantasy sports, but at the time fantasy sports were a fairly low-key, innocent activity,” Medenica said. “What the current venders have done is just elevate that to a huge, very visible end run around gaming regulations.”

Maryland also has a law that legalized private fantasy football leagues. (Full disclosure, this reporter is in one such private league and just climbed out of an 0-2 start to the season.)

Medenica hinted that some sort of reform on the issue could be coming in the near future.

“It certainly doesn’t fall under our purview, but we’ll see how this goes and the legal pushback that will occur,” Medenica said.