ANNAPOLIS — The state Senate approved Tuesday a clarification of a 2012 law against commercial daily gaming websites such as FanDuel and DraftKings, and advanced a referendum bill to allow voters in November to decide the legality of fantasy gaming.
The Maryland legislature’s action comes amid a national debate on daily fantasy gaming and after neighboring Virginia last month became the first state to regulate the industry.
If Marylanders vote against fantasy gaming in November’s referendum, the clarification would go into effect in January to outlaw such activity.
“It’s not regulated right now. It’s the wild West,” said Sen. Douglas J.J. Peters, the Prince George’s Democrat who sponsored the clarification bill. “[And] we want to give people an opportunity to decide, yes or no.”
Mr. Peters said lawmakers also are trying to be fair to casinos in the state.
Calling it an “outlaw, unregulated industry,” Sen. Jamie Raskin, Montgomery Democrat, said fantasy gaming would be brought “into the light of day.”
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Fantasy gaming has been in a gray area since Maryland Attorney General Brian E. Frosh released an opinion letter in January saying that traditional fantasy sports games are legal, but daily versions of games that can be played on websites might not be.
He suggested the legislature “clear up ambiguity” and said the state constitution might require a voter referendum to allow such sites to operate legally in Maryland.
In 2012, the state had enacted a law that removed fantasy games from the definition of gambling for small social groups, such as office pools, and for people who place bets using their sports knowledge rather than relying on chance. But it was not clear that such activity was thereby outlawed.
Fantasy sports sites have exploded in popularity in recent years. Bettors create fantasy teams using real-life athletes and place bets on how those teams compete against other participants’ fantasy teams, based on the athletes’ actual performance throughout the season.
Using daily sites, bettors can get frequent payouts, making it closer to illegal gambling than small social groups playing a game, some lawmakers argued.
If voters opt to legalize daily fantasy gaming, the Maryland State Lottery & Gaming Control Agency would regulate the websites and set annual fees.
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Many states have been contending with how to deal with fantasy sports betting.
Last month, Virginia opted to regulate such sites, which will be required to pay $50,000 to the state and submit to outside audits in order to operate. And the Minnesota Legislature is considering a measure to legalize fantasy gaming without regulation or taxes — though it is not technically illegal in the state because the law doesn’t address daily fantasy sports.
Other states, including Arizona, Iowa, Louisiana, Montana, Nevada, New York and Washington, have moved to ban fantasy sports. On Monday, FanDuel and DraftKings agreed to stop taking bets in New York in a deal with the state’s attorney general.
Attorneys general in New York, Illinois and Texas have released opinions saying fantasy sports are illegal gambling.
The Maryland Senate is scheduled to take a final vote on the bill Thursday.
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