A Maryland bingo hall called Bingo World was approved to become the state’s ninth retail sportsbook Wednesday morning.
At its latest meeting, the Sports Wagering Application Review Commission voted unanimously in favor of giving the Brooklyn Park facility a sports betting license. The approval marks the completion of the third step of a four-step process in a sportsbook launch.
Last month, Bingo World was approved by the Maryland Lottery and Gaming Commission by a 6-1 margin. Following SWARC’s decision, the application heads back to the Maryland Lottery and Gaming Commission.
The MLGC will look over the day-to-day aspects of the business such as accounting systems and security practices. Once the commission approves those procedures, the license will be issued.
With Bingo World getting the green light to move on, there are four applications in the final step of the process.
Last December, SWARC approved three off-track betting facilities in Frederick, Hampstead and a riverboat in what are considered Maryland waters.
But according to one commissioner, those properties are still exchanging information about their responsible gaming measures.
Designated facilities like Bingo World skip the first step
When Gov. Larry Hogan signed legislation legalizing sports betting in April 2021, the bill designated 17 facilities for retail sportsbooks.
The legislation listed Bingo World as one of them. The bill also designated the five casinos and three off-track betting facilities previously licensed by the state.
All of the locations listed in the bill were exempt from the first step of the application process. This is when the SWARC determines if it’s in the public’s best interest to give the entity a license. The committee also takes geographic factors into account when deciding.
With nine of those 17 places accounted for, there are eight applicants remaining.
One of the commissioners said that “three have submitted [applications] and are under some level of review.” The other five are still deciding whether to “jump into the market or not.”
Approval of Bingo World nearly guarantees Rush Street access to the MD market
Bingo World announced recently that it would be partnering with Rush Street Interactive. The Chicago-based gaming company will run the sports betting operation at Bingo World.
Rush Street operates the Rivers Casino brand, which has properties in Pennsylvania, New York, and Illinois. Additionally, the company will open a casino in Virginia early next year.
It also operates several online sportsbooks under the BetRivers brand, which is operating in nine states already. As a result of the partnership, Rush Street will likely gain access to the online betting market as well (whenever that launches).
Disparity survey still not completed, no timeline on mobile betting launch
Unfortunately for advocates of mobile and online betting, the meeting didn’t release a concrete timeline for launch. Regulators can establish a timeline for launch upon completion of a disparity survey.
The legislation that legalized sports betting in the Old Line State included a mandate that forced women- and minority-owned businesses to participate in the market. In response, SWARC tasked the law firm of Taft Stettinius & Hollister with completing a survey that highlights any barriers to entry those groups may face.
“They’ve begun their work,” said Maryland Assistant Attorney General David Stamper. “The Department of Legislative Services, Lottery, and Taft are working to get the necessary information so they can move forward as quickly as possible.”
Stamper didn’t provide any more information on the progress of the study. His comments don’t bode well for the best-case scenario September launch.
Key takeaways from the outreach survey
The law firm did not have the results of the disparity survey. However, it did have results from its outreach initiatives.
Three categories of operators responded to the survey:
- Significant operators: A publicly-traded company that operates in multiple U.S. markets and abroad.
- Mid-size operators: Companies that are only operating in a handful of American markets.
- New entrants: Companies that “appear interested in the Maryland sports wagering industry.” These companies tended to have “significant female or minority representation” in their ownership group.
Taft got responses from eight significant operators, three mid-size operators, and four new entrants. A nearly universal response to the survey was that the commission shouldn’t limit the number of licenses they award.
The state can award up to 60 licenses under the current legal framework.
“We asked folks if they thought we should limit that number in some manner,” said Kimberly Copp, Co-Chair of the Gaming Practice Group at Taft Stettinius & Hollister. “All of the respondents said they would rather let the market dictate the number of licenses are issued. In that SWARC should look at the number of qualified applicants it receives, regardless if that is all 60 or not.”
Some respondents also favored a staggered approach to issuing licenses. A portion of those respondents believed that companies with an existing “footprint” in Maryland should have early access to the market.
Other companies believed that smaller companies should get early access. Some thought a universal launch date would work best.
Potential problems with raising money to access the market
The survey also revealed that many operators believe access to capital is a potential roadblock for minority and female participants. As a result, commissioners brainstormed ideas on how to remedy the problem.
In fact, one of the requirements for approval is that the companies have SEC-registered investors as part of the group providing capital.
As SWARC Chair Thomas Brandt said:
“The notion that you need SEC registrants … that caliber of passive investor, draws attention to the fact that you can’t go to little Willie Adams to get a partner with some dough in 2022 to get out of the shoot inf you’re an entrepreneur trying to get into this industry. … There isn’t much minority private equity and indeed private equity is SEC-registered, typically.”
One of the representatives of the law firm believed that the government could change this by allowing private equity to have a stake in minority-owned companies in exchange for funding the operation.
Regulators will publish the results of the outreach initiative on the SWARC website. The results will be subject to comment for the next few days.
