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In this Oct. 25 photo, workers set up a DraftKings promotions tent in the parking lot of Gillette Stadium, in Foxborough, Mass., before an NFL football game between the New England Patriots and New York Jets. (AP Photo/Charles Krupa, File)

Md. Senate gives initial approval to two fantasy sports bills

ANNAPOLIS — Season-long fantasy sports leagues could be in jeopardy without bills to clarify a 2012 law that has sparked controversy over the pastime’s daily sports league cousin.

Senators were warned Tuesday of the unintended consequences of failing to act on two separate bills on the issue. The preliminary approval of both sets up a final vote in that chamber Wednesday so that the bills can be sent to the House of Delegates.

“What we’re trying to do is get our arms around what’s happening out there in other states,” said Sen. Douglas J.J. Peters, D-Prince George’s and sponsor of one of two bills that were given preliminary approval by the Senate Tuesday.

Peters’ bill would put the issue before voters in November, and, if approved by referendum, would require sites such as FanDuel and DraftKings to be licensed to operate in the state. The measure also would prohibit players under the age of 21 and bar more experienced players from playing in daily contests marketed to casual players.

A second bill, sponsored by Senate President Thomas V. Mike Miller Jr., would clarify a 2012 law that legalized office pools and non-commercial season-long fantasy contests, sometimes referred to as “beer and Fritos leagues.”  Commercial sites would be considered gaming and illegal in Maryland without enabling legislation and voter approval.

Both bills would move the authority to regulate commercial fantasy sports from the Office of the Comptroller to the Maryland Lottery and Gaming Control Agency.

“If the referendum gets defeated then all we’ve done is define the office pool games. That’s it. Then it will go to litigation,” Peters said.

A third bill, sponsored by Del. Eric G. Luedtke, D-Montgomery County and House co-chair of the  legislature’s Joint Committee on Gaming Oversight, also would move regulatory oversight of the industry to the gaming control agency. That measure awaits committee action.

The flurry of legislative interest was spurred by a December state attorney general’s advisory letter that stated commercial sites were not covered by a 2012 law legalizing fantasy gaming. The letter went on to say that such a change would require approval by  voters because the legislature moved gaming law into the Maryland Constitution in 2008 when it legalized casinos and slot machines.

States such as Illinois, Massachusetts and most recently New York have declared the sites as gambling ventures. Nevada requires the sites to obtain a gaming license in order to operate within that state.

The advisory letter declared the sites to be commercial gaming but stopped short of ordering them to cease operations in Maryland. Instead, the letter calls on the General Assembly to take action to clarify the 2012 law.

So far FanDuel and DraftKings continue to operate within the state, attracting about 130,000 players in Maryland, according to one industry estimate. Legislators say the sites currently are operating in a gray area.

Advocates for the sites say they are operating legally and have pressed lawmakers for the creation of a regulatory framework rather than new law that forces the issue to referendum.

Sen. Paul Pinsky, D-Prince George’s, questioned the need for both bills.

“In a sense, we’re hedging our bets,” Pinsky said.

Peters agreed but said the bills also work hand in hand to do different things.

“In one bill we’re clarifying the law,” Peters said. “In the other bill we’re putting it out to the people to decide if there should be commercial gaming.”

But Peters said failing to pass the legislation could have an unintended consequence.

“If both didn’t pass then the traditional office pools are in limbo,” Peters said. “That would happen if both didn’t pass.”