Representatives of four Maryland casinos told lawmakers this week that they support legalizing iGaming. The two other casinos in the state, not so much.
House Ways and Means Committee members heard both sides of the issue on March 4 during a hearing on House Bill 1319. A few days later, Senate Budget and Taxation Committee members listened to those same arguments about SB 565 and SB 603.
Both of these bills would legalize online casinos in Maryland under the control of the State Lottery and Gaming Control Agency.
iGaming operators could pay pay 55% tax rate under House bill
Even though Maryland online casinos are illegal, Marylanders can play sweepstakes and social online casinos. Real money is not used in wagering, but prizes won can be redeemed for cash.
Delegate Vanessa Atteberry, sponsor of HB 1319, said lawmakers should prioritize creating the best legal framework possible.
Under the bill, operators would pay a $1 million licensing fee, which would be in place for five years before renewal. Gaming revenue would be taxed at 55% unless the company offers live dealer games. Then, those operators get a considerable discount and only pay a 20% tax on revenues.
The Senate bill does not have the same provision. However, Sen. Ron Watson, who sponsored the Senate bill, repeatedly said his bill served as a guideline for the industry. Not a set-in-stone plan.
Four Maryland casinos support legal iGaming
Officials from four of the six Maryland casinos voiced their support for legal iGaming committee hearings last week.
MGM National Harbor
MGM Resorts Sr. VP of Government Affairs Rick Limardo, speaking on behalf of MGM National Harbor, said a legal online casino industry “is an incredible opportunity for Maryland.”
Limardo told the committee that he doesn’t view online casino gambling as a competitor to the company’s brick-and-mortar casinos. Rather, he sees iGaming as an extension to retail operations.
“Based on our experience, there are synergies between our retail casinos and iGaming that have allowed us to enhance the customer experience and build business with both. IGaming gives casinos a new way to engage with their customers and introduces a new demographic to land-based gaming, which is why we support a framework that tethers iGaming licenses to casino operators.”
Limardo said MGM’s customer base has actually grown thanks to online casino gambling.
“There are different types of players that play online versus brick-and-mortar. … We have over $1 billion invested in Maryland and would not jeopardize that investment if we thought iGaming would compete with or negatively impact our business.”
Horseshoe Baltimore
Randy Conroy, general manager of the Horseshoe Baltimore Casino, said he’s in favor of HB 1319, but with a few amendments.
“All iGaming licenses should be tethered to the existing six Maryland casinos. The existing casinos have proven experience administering casino gaming including strict adherence to all gaming regulations, such as anti-money laundering, know-your-customer, responsible gaming and underage protections. Moreover, Maryland casinos have the unique ability to cross-market iGaming with brick-and-mortar businesses.”
Conroy said online casino operations have the potential to boost traffic to the local casinos, which in turn leads to more jobs and additional tax revenue for Maryland.
Conroy did push back on the bill’s suggested 55% tax rate.
“iGaming should have a reasonable tax rate of 15%. You should demand the best iGaming experience in the country, which will require significant technological investments by the operators. iGaming is a fast-changing landscape with a different expense structure than traditional casinos. At a reasonable tax rate, iGaming will be demonstrably a better experience.”
Hollywood Casino Perryville
Representing Hollywood Casino Perryville, Caitlin McDonough told lawmakers that her casino endorses online casino gaming.
McDonough agreed with Conroy that online casinos should be tethered to existing retail operations.
“While we would join Horseshoe in supporting the bill with amendments to tether the licenses to brick-and-mortar casinos, we’re proud of our partnership with the state and what we’ve been able to contribute to education and other priorities to the state. We do support iGaming coming to this state and believe it can be implemented in a fair and equitable way that will benefit both the state and our gaming industry.”
Rocky Gap
Jonathan Carpenter of Greenwill Consulting spoke on behalf of the Rocky Gap Casino. He was not in attendance at the House hearing. But he did show up to the Senate discussion.
Carpenter echoed the sentiments of other operators that a reasonable tax rate was needed for a flourishing industry.
“The tax rate, maybe at 28%, wouldn’t hurt the casinos as much for all the reasons you’ve heard earlier.”
Two casinos don’t want online casino gambling in Maryland
Two Maryland casinos did not favor adding iGaming to the Maryland gambling market: Live! Casino and Ocean Downs.
The big issue voiced by representatives of the casinos was cannibalism. Their fear is the online market would eat away at the existing retail industry. That, in turn, would take away jobs, said Mark Stewart, who spoke at the hearing on behalf of Live! Casino.
“Many of the jobs that will disappear are accessible to those with a high school diploma or less.”
Rob Garagiola, who also represented Live! Casino at the hearing, asked members of the committee a simple question.
“How many businesses have closed due to online shopping?”
Atteberry has said protecting casino jobs is a top priority of HB 1319.
