Legal DFS Could Be Coming to Maryland and Illinois

Lawmakers in Illinois and Maryland, similarly to Hawaii and other states, have introduced legislation that would legalize daily fantasy sports (DFS) contests, expanding existing gaming laws to include new formats of fantasy play. If passed, these bills would establish clearer regulations for DFS operators while distinguishing the contests from traditional sports betting.

An advertisement for DraftKings' DFS games outside a New York venue. (Source: EPA)
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In Illinois, Senate Bill 1224, sponsored by State Senator Lakesia Collins, seeks to authorize all types of DFS contests, including both against-the-house and peer-to-peer contests. The proposal, known as the Fantasy Sports Consumer Protection Act, would place oversight responsibilities under the Illinois Gaming Board, which would be tasked with licensing and regulatory functions. However, it wouldn't have the authority to interfere with individual DFS contests or the digital operations of a platform.

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A key provision in the Illinois bill is an amendment to the state's Sports Wagering Act, which would explicitly exclude DFS from being classified as sports wagering. This distinction would ensure that DFS contests are regulated under their own framework rather than falling under existing gambling laws governing sportsbooks.

DFS operators in Illinois would be subject to taxation based on their adjusted gross receipts, with rates ranging between 10% and 15%. The Illinois Gaming Board would determine the final rate within that range. To secure the initial license, good for four years, operators would be required to pay the lesser of 8% of their previous year's adjusted gross receipts or $1 million. Subsequent renewals would be based on 1% of the adjusted receipts accumulated over four years.

The funds brought in by the initial licensing and renewals would be directed into state programs. The majority, 85%, would be allocated to the State Gaming Fund, while the remaining 15% would go toward initiatives that address problem gambling. Additionally, taxes generated from DFS would be used to support Illinois' Common School Fund.

The bill is currently under review in the Senate Assignments Committee. If approved, it would take immediate effect, allowing DFS operators to begin compliance procedures and licensing applications.

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Maryland DFS Bill Includes Multiple Options

In Maryland, a separate legislative effort is underway to expand DFS regulations. Senate Bill 470, introduced by Sen. Jim Rosapepe and Paul D. Corderman, along with House Bill 484, aims to redefine fantasy sports to include contests where participants play against a benchmark set by the operator. This change would allow against-the-house DFS contests in addition to peer-to-peer formats already permitted under state law.

The proposed Maryland legislation clarifies that DFS competitions would remain separate from sports wagering, ensuring that fantasy operators do not fall under the same legal classification as sportsbooks. The bill also includes a provision requiring the Lottery and Gaming Control Commission to establish a statewide exclusion program for individuals seeking to limit their gambling activity.

Both the Senate and House versions of the Maryland bill have scheduled hearings next month. If passed, the legislation would take effect on October 1, allowing for the necessary regulatory adjustments before implementation.

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