Maryland may no longer be the next US state to legalize online casinos. So says veteran casino industry analyst Steve Ruddock.
In “Straight to the Point” on Substack, Ruddock, a former Catena Media employee and current editor-in-chief of Gaming Law Review, cites the data point in The Innovation Group report to the Maryland Lottery and Gaming Control Agency showing a $200 million loss in land-based casino revenue in the state if online casino gaming is legalized.
Ruddock called it “extremely startling.” In his rankings of states that are close to legalizing online gambling, he dropped Maryland down from first (in September) to fourth, behind New Hampshire, Iowa and New York.
Take a loss now for gains later?
There is a bill filed in the state senate that would legalize Maryland online casinos. It’s expected to be considered during the 2024 legislative session that begins in January. If approved and fast-tracked, a referendum could be put to voters in November 2024.
The Innovation Group’s (TIG) report projects an annual revenue of $900 million from an online casino industry in Maryland. Factor in the shortfall of $200 million in expected yearly revenue lost by brick-and-mortar casinos, that still puts Maryland ahead by $700 million annually.
But Ruddock thinks casino operators may not want to face a big early loss before realizing a bigger gain.
Ruddock also notes that the TIG report may be dealing with numbers from online gambling states that saw unprecedented growth because of COVID-19 closures. Brick-and-mortar casinos closing may have inflated online casino revenue in the report.
Six states currently have legal iGaming markets. They are all big revenue producers and tax generators for the states. Michigan has the highest gross revenue from its online casino industry at $1.6 billion. It taxes online casinos at 25%.
Many observers see the TIG report as just one step in a long process.
The 49-page report prognosticated that an online casino market in Maryland could create nearly $1 billion in gross revenue annually. That would result in $225 million or more in tax revenue. The report postulates that the online casino market in Maryland would stabilize by 2029.
Playing a different hand
In September, another casino industry expert placed Maryland at the top of the list for the next state to approve online casinos.
Becca Giden, director of policy for consulting firm Eilers and Krejcik Gaming, cited three main factors for Maryland’s eventual approval. They included an existing robust retail casino market with national brands, a supportive legislature and no organized opposition to the activity.
Even with these factors, though, she still saw legalization as a 50/50 proposition.