The legality of fantasy sports websites operating in state is now under review by the Maryland attorney general.
Word of the informal review, requested by Senate President Thomas V. Mike Miller Jr., comes as the Joint Committee on Gaming Oversight canceled a hearing Monday that was to include discussion of a possible regulatory framework for the one-day sites such as FanDuel and DraftKings.
Short-term or one-day fantasy sports sites have some under increasing scrutiny and criticism in recent months from elected officials in Maryland and other states. Some states, such as New York and Nevada, have barred the activity, saying it amounted to illegal gaming activity.
Maryland has yet to answer to answer the basic question of whether the sites can operate in the state at all. Miller’s request for advice from Attorney General Brian E. Frosh could provide an answer to legislators.
“The Senate President informed the Committee that he has asked for the advice of the attorney general on the legal issues surrounding this matter and that information will be available to the joint committee in the coming weeks,” Sen. Nancy J. King, D-Montgomery County and co-chair of the Joint Committee on Gaming Oversight, said in a statement released late Monday afternoon.
The advisory letter from Frosh, which is less formal than an opinion, could be delivered to legislators by next week. The committee then could reschedule a hearing before the General Assembly reconvenes in January.
Until Miller’s request, Frosh has declined to take a public position on the the sites.
In 2012, Frosh as a legislator, was the only senator to vote against a law that legalized fantasy football gaming in Maryland. The intent of the bill, at the time, was to legalize non-commercial or social games that are common place. Since then, fantasy sports sites have grown more prominent.
Frosh, through a spokesman last month, said he would participate in a review of the sites by Comptroller Peter V.R. Franchot. The comptroller is responsible under the 2012 law with regulating fantasy sports activity but has not drafted rules since the law took effect.
At the time, Frosh said he voted against the bill because it constituted an expansion of gambling. Through a spokesman last month, he declined to say whether such activities constituted illegal gaming under the law or if he would investigate the industry.
“As The Daily Record has reported, the Comptroller’s office is taking the lead on a review of fantasy sports operations in Maryland, and representatives from the Office of the Attorney General will be providing legal counsel as that review proceeds,” David Nitkin, a Frosh spokesman, said in a November email.
Should Frosh’s letter advise that such activities are illegal, it is unlikely that the committee will seek to discuss potential regulations. It is equally likely that such a determination will result in lawsuits similar to those filed in New York.
A work group headed by Franchot is scheduled to meet on Thursday.
In October, Maryland Lottery and Gaming Agency Director Gordon Medenica called the rise of fantasy sports sites “a powder keg” and raised concerns about the legality of such operations.
“What the current venders have done is just elevate that to a huge, very visible end run around gaming regulations.”
The announcement of the review comes just days after a series of judicial rulings in New York.
New York Attorney General Eric Schneiderman said such sites are engaging in illegal sports betting and ordered them to cease operations in the state.
On Friday, a New York state judge temporarily barred the sites from operating in the state pending a hearing on the matter but by the afternoon a federal judge issued a stay to allow the sites to continue operating for the time being, according to the Associated Press.