Maine may tax, regulate fantasy sports leagues

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AUGUSTA — As the Major League Baseball season gets underway, legislators are looking to regulate — and tax — the fantasy sports leagues that have sprung up around every significant sport.

Under a new proposal unveiled Monday, anyone operating a fantasy league would have to register annually with the Department of Public Safety and pay a fee of up to $5,000 to the state depending on the league’s revenue.

State Sen. Roger Katz, R-Augusta, proposed the measure which would clarify the legality of the fast-growing fantasy sports industry, set out regulations for leagues and collect fees from them.

With millions of fans managing fantasy teams and billions of dollars on the line, fantasy sports long ago moved beyond its nerdy origins among sports fans with a statistics obsession.

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Participants generally pay a nominal fee to create a team made up of players in a professional sport whose makeup can shift with trades, drafts and the like. The winners are those who manage to assemble teams whose players post the most impressive numbers in their real-life performances.

As more and more went online — and statistics grew ever more automated for easy use — fantasy sports exploded in popularity, soaring from less than a million people in the 1980s to more than 50 million today. The most successful fantasy players can make big money managing their teams but many leagues are small and payouts modest.

The Fantasy Sports Trade Association estimates the average participant spends $465 annually on the activity, with football the favored sport.

Under Katz’s bill, it would become illegal to operate a fantasy sports league in Maine without registering it with the state each year. They would be required to pay a fee of 10 percent of the fantasy contest operator’s revenues in the past 12 months, capped at $5,000.

They would also have to abide by new state standards that would, among other things, bar leagues from using high school and college players and verifying that those participating in the leagues are at least 18 years old. In addition, the employees of fantasy sports operators, as well as any athletes and officials who could impact the games the contests are built on, would not be allowed to play.

Among those joining with Katz to push the bill are the Republican and Democratic leaders in the Senate and Reps. Jared Golden, D-Lewiston, and Jeff Timberlake, R-Turner.

Other states that have already begun regulating the industry include Colorado, Indiana, Massachusetts, Missouri, Mississippi, New York and Virginia. Some states, though, have barred the leagues as a form of illegal gambling.

The measure is likely to be sent Tuesday to the Committee on Veterans and Legal Affairs for its consideration.

State Sen. Roger Katz

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