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Maryland Senate President Thomas V. "Mike" Miller. (File Photo)

Miller: Fantasy gaming violates Maryland Constitution

A 2012 law meant to legalize fantasy football and related gaming in Maryland violates gaming laws enshrined in the Maryland Constitution, Senate President Thomas V. Mike Miller Jr. says.

Miller, who voted for the law nearly four years ago, made his comments during a wide-ranging interview and at a time when he has requested an advisory letter on the legality of the industry from the counsel to the General Assembly.

“Right now, it’s unregulated, it benefits people who are not in our state, and if it’s going to happen it needs to happen pursuant to the Maryland Constitution and be approved by the people of the state of Maryland.”

The General Assembly in 2012 passed a law legalizing fantasy football in the state. Supporters of the bill, including the sponsor of the measure, said the intent was to legitimize social games that “existed within the realm of office pools and finished-basement drafts between friends over beers and Fritos.”

That was before the rise of one-day fantasy sites such as FanDuel and DraftKings.

In recent weeks those sites have come under intense scrutiny, in Maryland as in other states, with state Comptroller Peter Franchot and Lt. Gov. Boyd Rutherford questioning the legality of the sites and suggesting they are akin to sports gambling.

Miller, in the interview, said he believes the 2012 law he voted for should have gone before voters in a referendum because of a law passed four years earlier, and approved by the voters, that placed all gaming in the state constitution.

“The (Maryland) constitution trumps everything,” Miller said. “The constitution trumps any law we passed.”

Representatives of FanDuel was not immediately available for comment.

Jonathan Schiller, counsel to DraftKings and managing partner at Boies, Schiller & Flexner LLP, said the Senate president’s comments have no effect on current operations in Maryland.

“Hundreds of thousands of Marylanders enjoy participating in daily fantasy sports contests every year,” Schiller said in a statement. “The Maryland General Assembly overwhelmingly passed a law in 2012 that clearly established that fantasy sports, including (daily fantasy sports), were not gambling and are legal in Maryland.  The governor signed the law and it remains in effect today.”

Last month Miller asked the legislature’s attorney to issue an advisory letter on the issue. That letter was initially expected before the end of the year. And while Miller said the legislature needs to have that letter before moving forward, he is not without a strong opinion on the matter.

“This is an issue, we said, ‘In Maryland, if you’re going to have a new form of gambling in Maryland it has to be decided by the public,'” Miller said. “We put that in our constitution, and quite frankly that was designed to deal with issues such as this. So it’s clearly (unconstitutional). It hasn’t been approved by the public, hasn’t gone on the ballot and I’m not sure it would make it on the ballot, and if it were on the ballot I don’t think it would be passed, quite frankly.”

When asked, the long-time leader of the state Senate said he made little distinction between daily fantasy sports games that have exploded in popularity and are mainstay advertisers on NFL and other broadcast pro sporting events and informal competition among friends and office workers.

As many as 57 million people played in some sort of fantasy sports league, according to the Fantasy Sports Trade Association. About 100,000 people play some form of daily game, according to Fantasy Sports for All, an industry umbrella group that includes FanDuel and DraftKings and is leading an effort to keep the sites legal in Maryland.

It is not clear how many others participate in so-called social fantasy leagues in offices and with friends.

States such as Illinois, Massachusetts and most recently New York have declared the sites as gambling ventures.

Miller said all of those games, in his opinion, are not legal and require voter approval. Furthermore, he said, the games hurt the state lottery and casino industry.

The Senate president’s comments come at a time when lawmakers and other officials are taking a serious look at the daily fantasy industry.

Last month, Franchot, who is also charged with regulating fantasy gaming under the 2012 law, held the first of a series of what a spokesman called “fact-finding meetings” to determine the legality of the daily industry and perhaps write the first regulations that would govern such games in the state.

Andrew Friedson, a spokesman for Franchot, said that effort will move forward.

“In assuming a role traditionally ascribed to the attorney general, Senate President Miller is venturing well beyond the bounds of his office,” Friedson said. “The comptroller isn’t going to speculate on the Senate president’s motives, but he fully intends to proceed with his process of regulating daily fantasy sports to ensure that sufficient consumer protections are in place and that taxes rightfully owed are properly collected.”

Bill Ordine, a local journalist who has written extensively on gambling and is the author of “Fantasy Sports Real Money,” said opposition to the fantasy sports comes from two unlikely allies.

“It’s the saints and sinners coalition,” Ordine said, defining those sides as groups who either oppose all forms of gaming and those who see this as competition to traditional or legacy operations, such as casinos and lottery.

Additionally, casinos see it as a long-term threat and are envious of fantasy sports because “millennials have made it their drink of choice,” said Ordine.

“This has proved to be extremely popular with millennials and that’s the code that traditional gaming hasn’t been able to crack,” Ordine said. “What has happened is that daily fantasy now presents this threat to legacy gaming.”

Miller’s request of the legislature’s attorney also abruptly halted a review last month by the Joint Committee on Gaming Oversight.

Del. Eric Luedtke. D-Montgomery County and co-chair of the oversight committee, suggested that some of the division on the issue is generational.

“We live in an era where a lot of people want the government out of their decision-making. Clearly, there needs to be some strong consumer protections,” Luedtke said. “It’s a new industry but this smacks of the politics we saw in the 1950s.”

Six decades ago, just before the state began prohibiting slot machines in Maryland, there were nearly 10,000 of them in counties such as Anne Arundel, Charles, St. Mary’s and Calvert — Miller’s home county.

“This is not the same thing as a slot machine,” Luedtke said.

And while Miller argues that fantasy games are hurting the state, Luedtke said that’s hardly the case.

“I don’t see this competing with big gaming,” Luedtke said. “I don’t see a guy making a choice between slot machines and FanDuel. I think the casinos are doing pretty well and making a ton of money.”