The Sports Wagering Application Review Commission (SWARC) took one of the first steps in launching Maryland online sports betting last week.
The SWARC met last Wednesday, Jan. 19, to discuss updates on a disparity survey and an informational outreach presentation.
However, potential applicants must complete the surveys and regulators distribute the presentation before state officials move forward.
During their meeting, SWARC members unveiled the survey as well as a presentation for small businesses eligible for a Maryland sports betting license.
The survey was aimed at deciding if anything needed to be done to increase the participation of minority- and women-owned businesses in the industry. The presentation, on the other hand, will inform small businesses about the intricacies of the sports betting market.
Disparity study for Maryland online sports betting completed
When Gov. Larry Hogan signed HB 940 into law last year, sports betting was officially legal in the Free State. Additionally, the legislation mandated that women- and minority-owned businesses participate in the new market.
SWARC asked for a disparity study last September to help implement that part of the new law. It tasked the law firm of Taft Stettinius & Hollister with the job, and the firm gave the initial survey to regulators at last week’s meeting.
Under Maryland law, sports betting licensees fall under one of four categories, depending on how large the company is.
Only the state’s casinos and professional sports stadiums are eligible for Class A-1 and A-2 licenses.
On the other hand, small businesses such as restaurants and bars are eligible for Class B licenses. Class B-1 licenses are for companies with more than 25 employees or more than $3 million in gross sales. And B-2 licenses are for businesses that fall short of those thresholds.
Both Class A and B licensees are eligible to apply for mobile licenses.
Given the size difference between the two, it is much easier to get women and minority-owned companies to apply for Class B licenses. Therefore, the law firm wrote most of the questions regarding Class B licenses. As one question read:
“If a sports wagering facility license (whether Class B-1 or B-2) or mobile license were awarded to a minority-or-women-owned entity, do you believe that established sports wagering organizations would be willing to enter into a partnership/joint venture with such entity in which the established sports wagering organization provides financing and/or operating expertise in exchange for a revenue-sharing arrangement?”
Potential applicants must complete the survey by Feb. 18.
Informing potential applicants about the online sports betting market
The PowerPoint presentation unveiled at the hearing showed how long the road still is before online betting launches in Maryland. Taft Stettinius & Hollister created both the survey and the presentation.
Based on the slides, regulators believe that most small businesses lack basic knowledge about the sports betting industry.
For example, the presentation explained the difference between the four types of licenses and their costs. It also talked about the ability to partner with an established sportsbook operator. Partnerships are standard practice even for larger businesses with Class A licenses.
State officials hope that the outreach program will give businesses a wider knowledge base. If successful, it will result in a prosperous online market.
When will online sportsbooks appear in Maryland?
It looks like the already hopeful September target Maryland Lottery & Gaming Control Commission director John A. Martin gave PlayMaryland a few weeks ago is still the best-case scenario.
However, SWARC Chair Thomas Brandt said the group would not take any further action until the disparity study is complete.
Once operators return the survey, regulators will complete the outreach program and businesses need to file applications. Then, the MLGCC will complete background checks and distribute licenses.