Update on Fantasy Sports and the Law: Change Coming to Maryland

For those who may have missed it, the State of Maryland on April 1, 2012 passed House Bill 7 (pdf): a bill to exempt certain online fantasy sports games from its gambling prohibitions. Instead of prohibiting all fantasy sports games, the bill will allow the state Comptroller to issue special regulations related to the governance of America's fastest growing hobby.

The recent Maryland bill defines "fantasy sports" similarly to how Congress did in the 2006 Unlawful Internet Gambling and Enforcement Act. This means that the bill only applies to fantasy games that are based on skill, have predetermined prize amounts, and derive results from the performance of multiple players across multiple teams.

Based on this definition, it seems likely that Maryland residents will soon be allowed to legally enter and collect prizes in most fee-based fantasy sports contests. Indeed, CBS Sports has already amended its Terms of Service (here) to allow Maryland residents to collect prizes. By contrast, the Yahoo! Terms of Service currently continues to disallow Maryland residents.

For a more thorough discussion of the legality of fantasy sports games as well as a list of states where participating in fantasy sports games remains risky, see my 2012 Harvard law journal article, A Short Treatise on Fantasy Sports and the Law.