Maryland took the first step toward passing the most inclusive sports betting law in the US.
The Maryland House of Delegates passed H 940 Thursday by a 130-9 vote.
The bill advanced from committee last week with increased licenses permitting sports betting participation from casinos, racetracks, off-track betting parlors, sports teams/stadiums, and possibly bars and other smaller businesses.
That the bill moved quickly through the House was not a surprise. Speaker Adrienne A. Jones took up sponsorship of the legislation herself, making minority inclusion a priority.
The bill moves on to the Senate, which might have its own ideas on how to do sports betting in Maryland.
Details of Maryland sports betting legislation
Here are key details of the House bill:
- Appoints the Maryland State Lottery and Gaming Control Commission as the regulator.
- Permits Class A retail sports betting licenses to six Maryland casinos, three racetracks, Baltimore Orioles, Baltimore Ravens, Washington Football Team, and the Riverboat on the Potomac.
- Provides 10 Class B retail licenses meant for smaller, possibly minority-owned businesses.
- Creates 15 mobile sports wagering licenses.
- Sets initial fees for sports wagering licenses as $250,000 for a Class A license, renewable for $50,000; $500,000 for a mobile license, renewable for $100,000; $50,000 for a Class B license, renewable or $10,000.
- Sets a tax rate of 15% on retail wagers. For mobile wagers, there is a tiered tax rate of 15% for the first $5 million in proceeds in a calendar year, 17.5% thereafter.
- Provides extensive language on promoting participation from minority-owned businesses, including the creation of a Sports Wagering Application Review Commission.
- Also regulates fantasy sports and sets a 15% tax rate.
After one hearing, the Committee on Ways and Means made 12 amendments to the legislation as introduced. Most focused on increasing the licenses and ensuring minority participation.
“I think the changes we made were good,” said Rep. Eric Ebersole, a co-sponsor. “We expanded the number of licenses, which some argue is too many, but only the people who are going to own them, I noticed. I think more competition is better and will make them work harder to get market share.”
A blueprint for minority inclusion in gambling
Ebersole admitted that the purpose of sports betting legislation in the House changed since he introduced a bill last year. His original intent was to create more traffic at casinos.
Del. Darryl Barnes, chair of the Legislative Black Caucus, convinced him that the bill had greater importance to help diversify Maryland’s gambling industry.
“When I brought this last year, I was just looking at casinos having this,” Ebersole said. “I missed the connection they saw accurately that this is a new business in Maryland and we had work to do to ensure we’re being inclusive. Our bill now is fair to casino ownership but also fair to smaller businesses and provides opportunity for minority ownership.”
While the bill includes language meant to encourage minority participation, it stops short of requiring it. Ebersole said the attorney general warned lawmakers that they can’t mandate a certain number of licenses for minority ownership.
He expects the Sports Wagering Application Review Commission to take ethnic and geographic diversity into account in issuing Class B licenses.
Ebersole explained that the Riverboat at the Potomac and sports teams/stadiums were added to Class A licenses to leave more openings for small businesses to pursue Class B licenses.
“It could be anybody, really,” Ebersole said. “We wanted to be sure that we got affordable licenses so that we would have the opportunity for more diverse ownership. There are a handful of OTBs in Maryland who could bid for them. Sports bars could bid for them.”
Maryland sports betting’s path to the finish line
In the Senate, Sen. Craig Zucker has hosted a work group to listen to expert testimony on how Maryland should conduct sports betting. However, the work group hasn’t met in two weeks.
The Senate has until the March 20 crossover deadline to pass its own sports betting bill. However, at this point, it seems content to work from the House version.
If the Senate makes changes to the House bill, it would go back to the House for approval. That could lead to a conference committee to work out the differences. Maryland’s legislative session runs to April 12.
Gov. Larry Hogan then has the opportunity to sign or veto the bill. Hogan supported the referendum last year through which Maryland voters legalized sports betting.
“I’ve got to feel like we’ve done this much work, we’re not going to let it get away from us this session,” Ebersole said. “People are ready for sports betting, they voted for it, and we’ve settled the problems with ownership. I can’t imagine not having it happen this session.”