January 4, 2017
This week, regulations governing fantasy sports contests in the State of Maryland went into effect. The regulations, implemented pursuant to a 2012 law exempting fantasy sports from the State’s gambling prohibition, vest the Office of the Comptroller with authority to enforce various consumer protection rules aimed at establishing basic rules to ensure fairness in the Maryland fantasy sports industry.
What are the key components of the Maryland fantasy sports regulations?
The Maryland fantasy sports regulatory scheme provides the Office of the Comptroller with broad regulatory authority over fantasy sports operators, including mandates for, at a minimum, the following:
- Prohibitions against allowing an operator’s employees and family members to participate in contests and from sharing material nonpublic information with third parties;
- Establishing a limit on the maximum number of entries that a single participant can submit to a single fantasy sports contest;
- Prohibitions against participation of minors, as well as prohibition against offering contests that incorporate collegiate or high school athletic performances;
- Prohibitions against the use of scripts;
- Prohibitions on advertisements which depict students, college settings or minors, except professional athletes who may be minors; and
- Requirements for operators to submit to annual independent third-party audits.
While compliant operators and contests would be exempt from prohibitions against unauthorized gaming, transgressors run the risk of violating the State penal law.
The Ongoing Need for Fantasy Sports Lawyers: Keeping Maryland Fantasy Sports Ventures Compliant
Fantasy sports contests and the laws and regulations that govern them, continue to grow and evolve. Between various legislative efforts across the country affecting the industry, conflicting opinions from attorneys general and court challenges to newly-enacted legislation, it is clear that the legal landscape of the fantasy sports space is far from settled. Against this backdrop, it remains imperative to engage a competent fantasy sports lawyer to become/remain compliant with applicable law when setting up and operating fantasy sports contests.