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Comptroller Peter Franchot. (The Daily Record / Maximilian Franz)

Franchot: Regs on fantasy gaming won’t address its legality

Don’t look to forthcoming fantasy gaming regulations from Comptroller Peter Franchot to answer the central question of whether the popular activity is legal under a 2012 Maryland law.

Franchot, who hinted at regulations during a wide-ranging interview in late June, canceled a meeting with reporters scheduled for Thursday in which he was expected to lay out his first pass at regulating the industry that includes such companies as DraftKings and FanDuel.

But when asked if he, a long-time opponent of some gambling in Maryland, believed the fantasy leagues were legal under a 2012 law, the state’s top tax collector sidestepped the question.

“The issue we have here is that people are playing this,” Franchot said. “It has not been ruled completely legal. The legislature debated it. People need simple consumer protections. There need to be some guidelines. That’s why they gave me regulatory authority. That’s why we’re taking a look at it. It’s not are you for it or against it. It’s simple consumer protection.”

Some legislators, including Sen. Nancy King, D-Montgomery County and Senate chairwoman of the Joint Committee on Gaming Oversight, question whether the state can legally regulate an industry that is shrouded in questions regarding its own legal operations in Maryland.

Franchot was one of the first officials in Maryland to question the industry during a Board of Public Works meeting last October. During that meeting he called the industry a “blatant gambling operation” and said it was “one half-step away from the total corruption of sports.”

He did not, at the time, say it was illegal.

Supporters of the activity that draws an estimated 500,000 Maryland-based players point to a 2012 law that made so-called “beer and Fritos” leagues legal as providing the state’s blessing for the commercially organized leagues.

But a 22-page advisory letter from the Office of the Attorney General said sites such as FanDuel and DraftKings are commercial gaming and are not legal because they were not approved by voters through a referendum. The letter went on to ask the legislature to deal with the issue.

In the 2016 legislative session, a number of bills on the issue were introduced. None passed, and legislators left Annapolis in April with the question unanswered. Lawmakers were expected to meet over the summer on the issue but so far have scheduled no public meetings on the topic.

Franchot, who was given authority to draft regulations under the 2012 law, has never done so.

“I held off on the regulations because I wanted the legislature to determine what the policy should be,” he said in an interview with The Daily Record. “They didn’t so we’re just going to have to assess that.”

Franchot said he is concerned with providing consumer protections to players in Maryland,  noting that the attorney general’s letter didn’t fully clear up the issue.

“There’s an argument to be made that there are a million Marylanders engaging in this activity from a recreational standpoint,” Franchot said. “I’m not super enthusiastic about going to them and saying stop. ”