The Maryland House Ways and Means Committee voted Wednesday to move online casino legislation to the House floor.
However, they approved an amended version of the bill that will likely be tougher to pass than its original version.
The House Racing and Gaming Subcommittee amended the bill during a hearing on Tuesday. Now, the bill prohibits Marylanders from using credit cards to fund a Maryland online casino account and increases the number of potential licenses from 12 to 30.
Language around licensing requirements will create future hurdles for the bill.
Amendment creates three categories of licenses
When Del. Vanessa Atterbeary originally introduced HB 1319, the bill included 12 untethered licenses. When the subcommittee was done with it, that number jumped to 30 and created three different types of licenses:
- Casino licenses
- Class B licenses
- Competitive bid licenses
Maryland’s six casinos are eligible to receive a casino license. Those operators can have up to three licenses based on how much iGaming revenue they share with a social equity applicant partner.
The four off-track betting parlors and two bingo halls could receive a Class B license. Lastly, at least five licenses will be auctioned off to the highest bidder.
Casinos must have a social equity partner
Maryland land-based casinos must share 5% of online casino revenue with a social equity applicant partner to receive a license.
They can receive a second license if they share 33% with the partner and a third if they share another 5% with a different partner.
A social equity applicant partner is defined as a person or group of people that have lived in an economically disadvantaged area for at least five of the past 10 years. Additionally, they must fit one of these three categories:
- Attended public school in an economically disadvantaged area for at least five of the past 10 years.
- Attended at least two years at a four-year college in a state where at least 40% of individuals are eligible for the Pell Grant.
- Has a personal net worth that doesn’t exceed an amount determined by the commission.
Class B licenses do not have the same social equity applicant partner requirements. But lawmakers earmarked one for Urban One, a black-owned Maryland media company and former stakeholder in MGM National Harbor.
During House hearings on the bill, Urban One CEO Alfred Liggins said the company would build a production studio for the industry’s live dealer operations.
The first round of bidding for competitive bid licenses are open for social equity applicants. The second round is open to everyone.
Casino and Class B licenses will be good for five years and cost $1 million. Renewals cost 1% of the average gross gaming revenue for the previous three years.
Credit card ban creates problems for existing sportsbooks
On the surface, banning the use of credit cards for online casino purposes seems fair. But it creates a problem for sports betting operators who qualify for an online casino license.
Maryland sports betting regulations allowed operators to accept credit card deposits. Thus, the amendment would prevent companies offering both online casinos and sports betting from sharing wallets.
If wallets were shared, customers would only be a click or two away from the company’s other vertical. The amendment creates friction for the consumer and would keep operators from cross-promoting products easily.
Sen. Ron Watson, the author of the Senate’s online casino, told PlayMaryland’s sister site, PlayUSA, that state gaming regulators told him to keep a similar ban out of his bill because it could create issues.
Bill must be passed by Monday
All House bills must be passed by Monday, March 18, the crossover deadline to send legislation to the Senate.
The bill already faces pushback from labor unions and two of the six casinos in the state. The other four casinos and other industry stakeholders will likely oppose the amendment.
If lawmakers pass the bill, the Senate will have until April 8 to decide if the legislation goes to Gov. Wes Moore’s desk. But there’s no guarantee the upper chamber would pass the amended version.
