Maryland lawmakers discussed the possibility of online casinos coming to their state for the second time this week.
The conversations were nearly a carbon copy of one another.
The Maryland Senate Budget and Taxation Committee held a hearing Wednesday afternoon. Sen. Ron Watson’s pair of bills to legalize Maryland online casinos was one of the items on the agenda.
Watson filed SB 565 and SB 603 at the start of the legislative session. The bills work together to bring online casinos to the Old Line State.
The upper chamber’s discussion came just two days after the House Ways and Means Committee heard testimony in the lower chamber about legislation that would do the same.
Same arguments and experts appeared at both hearings
Monday’s House marathon hearing lasted seven hours, with just as many expert panels to testify in favor of or against the bill and take questions from legislators.
Wednesday’s hearing wasn’t quite as long, but it still took several hours and featured numerous panels on both sides.
However, the arguments and issues raised were precisely the same as on Monday. Tax rates, responsible gaming measures and cannibalization concerns dominated the testimony.
Those in favor lobbied for lower tax rates, claimed iGaming’s responsible gambling safeguards were effective and that the new industry gave brick-and-mortar operators the ability to cross-promote their platforms, ultimately increasing revenue and foot traffic at existing land-based casinos.
The only significant disagreement between those favoring the bill was with the structure and number of iGaming licenses available.
Representatives of existing land-based casinos thought licenses should be tethered to them, but other testimony lobbied for sportsbooks to get licenses, too.
On the other hand, those against the bill said it would kill jobs and lead to increased gambling addiction.
The panels featured a ton of the same people presenting the same arguments. Brandt Iden of Fanatics, representing the Sports Betting Alliance, Bobbi Jones of Ocean Downs Casino, Jeff Ifrah of iDEA group, and many others were all making their second testimonies of the week.
The biggest difference between the hearings was the lack of questions from Senators. The hearing was mostly filled with testimony from the panels. By contrast, there was more debate between lawmakers and panel members at the House hearing.
County representative brings up new argument
While most of the arguments were repetitive, Diana Purnell made one of the few new arguments on the day.
Purnell is a Worcester County commissioner, where Ocean Downs Casino resides. Purnell said the county board unanimously opposes the bill because Ocean Downs’ revenue pays for most of the county’s expenditures. Thus, a small drop in brick-and-mortar revenue could significantly hurt local tax revenue.
The claim is still downstream of the cannibalization argument made by others opposing the legislation. However, Purnell was the first to raise it from a local government revenue standpoint.
Details of the bill
Watson started the hearing by breaking down the critical components of his legislation. The bills work together to legalize the new industry.
Maryland gaming expansion requires a constitutional amendment. As a result, the General Assembly must pass the law, and then voters must approve it at the ballot box this fall.
SB 565 establishes the language for the question on November’s ballot.
“Do you favor the expansion of commercial gaming in the state of Maryland to authorize internet gaming for the primary purpose of raising revenue for education?”
SB 603 then provides the details of the expansion plan. But Watson was adamant that the details are just a starting point, not the final product.
SB 603 Key Components
- The new industry would be regulated by the Maryland Lottery and Gaming Control Commission
- Maximize minority participation in the industry
- Capture revenue to support the Maryland Film Office
- Six casinos can have up to two operator licenses each (two skins)
- Also known as tethered licenses
- There will be five additional untethered licenses
- $1 million license fee suitable for five years
- The renewal fee is 1% of the average annual revenue of the previous three years
- 47% tax rate
- Privacy protections
- Information can’t be shared with third parties
- Prohibits targeted advertising to at-risk or prohibited bettors
- Responsible gaming measures
- Specific controls can be placed on a player’s account
- For example, operators can limit the amount of money deposited within a certain timeframe
- The gambling hotline must be displayed when logging in and off the platform
- Users must certify they read a disclosure identifying the risks associated with gaming before an account can be opened
- Must re-certify that disclosure on a monthly basis
- Morgan State and Bowie State professors get access to data to identify problem gaming trends so they can help implement other measures
- Specific controls can be placed on a player’s account
- Allows the governor to enter into agreements with other states
- Specifically mentioned the multi-state internet gaming agreement currently in place between Nevada, New Jersey, Delaware and Michigan
