The federal Unlawful Internet Gambling Enforcement Act (UIGEA) has a specific carve-out exempting fantasy sports contests, as long as they operate within certain stated parameters. Maryland is seeking to insert that same language into state law.
Current Maryland law is unclear with regard to the separation of games of skill from gambling, which is why fantasy sports companies generally shy away from allowing Maryland residents to compete for prizes, or shy away from allowing them to participate at all.
There are nine states where state law is not very clear or undifferentiated between a skill game and a gambling game. These states are: Louisiana, North Dakota, Montana, Iowa, Arizona, Vermont, Maryland, Arkansas and Florida. Fantasy sports companies, in general, place restrictions on players that reside in those states. Maryland is attempting with the legislation to make a clear distinction, which will allow residents to fully participate in prize-based fantasy sports contests.
Montana in 2007 passed a law legalizing pari-mutuel wagering on fantasy sports, but that was an expansion of their gambling law, and not impacting the conduct of contests. Fantasy sports contests in Montana are controlled by gambling statutes as well, with the bulk of the contests affiliated with in-person contests, not utilizing online formats.
The proposed Maryland legislation is further confirmation of the continuing popularity of fantasy sports. The Fantasy Sports Trade Association currently estimates 27 million Americans play fantasy sports, an $800 million industry.
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