Maryland seems to have all the right ingredients to pass sports betting legislation this year.
State voters already legalized sports betting last November, tasking lawmakers with creating implementation language.
House Speaker Adrienne A. Jones introduced such legislation. So legislative leadership isn’t just on board but driving the train. And H 940 focuses on addressing minority inclusion concerns that derailed the bill last year.
However, the first hearing on the sports betting bill Thursday in the House Ways and Means Committee showed that there are a lot of issues still to be worked out in Maryland.
Many want to participate in Maryland sports betting
The House bill as drafted allows for eight Class A licenses to Maryland’s six casinos and three racetracks (with two that share ownership using one license), five Class B licenses intended for smaller companies, and 10 online sports wagering licenses.
But Thursday’s hearing featured 25 witnesses testifying. And most of them want to participate in Maryland sports wagering. These entities included the Maryland State Fair, pro sports teams, minor league sports teams, and off-track betting parlors.
Thomas Kelso of the Maryland Stadium Authority asked for teams themselves to have sports betting licenses. Currently, the bill allows for sports betting at the stadiums for the Baltimore Orioles and Ravens through casino partnerships. But there seemed to be some confusion over how that would work.
Gerry Brewster of the fair asserted that 50 surrounding neighborhood associations already voted in favor of fairs getting sports betting. The fairs offer live thoroughbred racing.
Jack Lavoie of the Southern Maryland Blue Crabs said his team had an ideal facility to host a brick-and-mortar license. But he wants a mobile license as well. He stressed that equity not only was important in terms of minority inclusion but also geographically. These minor league teams tend to be located in smaller cities.
Bingo halls, sports bars, and lodges were other possible retail sports wagering facilities mentioned.
Minority business inclusion takes center stage
Jones, the first African-American and woman to hold the office of Speaker of the Maryland House of Delegates, included pages of language to promote minority participation in sports betting.
Last year, the Legislative Black Caucus made it clear that minority-owned businesses (MBEs) shouldn’t just receive a percentage of sports betting tax revenue. They should participate. Del. Darryl Barnes, chair of the Black Caucus, supports the legislation.
“Black caucus members still remember minority businesses being completely shut out a few years ago when the state awarded 15 initial licenses in the medical cannabis industry. Given this, it is our responsibility to ensure that we learn from those mistakes and make a commitment to award some percentage of sports betting licenses to minority owners the first time around.”
However, some witnesses asserted that the bill doesn’t do enough.
Geary Gunter of GreyStar Technology Consulting recommended requiring reserving up to half of online licenses for applicants that have at least 51% minority ownership for an initial 30-day period. He asked for application and licensing fees to be reduced by 50% for majority MBE-owned licensees in the first year.
Malik Edwards, owner of DC Sportsbook LLC, suggested that all applicants be required to identify minority investors and that a 10-mile protective radius for Class A licensees is going overboard. It prevents Class B licensees in and around Baltimore.
Del. Jason Buckel cautioned making sure the minority participation language doesn’t face legal scrutiny to further delay Maryland sports betting.
Increase online sports betting licenses
One way to increase minority participation agreed upon by sportsbook representatives is to increase the limit for 10 online licenses.
Tony Jones, equity owner of off-track betting parlor Riverboat on the Potomac, pointed out that eight of the 10 mobile licenses are going to go to the Class A licensees. That leaves minority-owned businesses such as his OTB to fight over two mobile licenses. He suggested doubling the online licenses from 10 to 20.
“A brick-and-mortar license is not for us a game-changing or generationally appropriate opportunity for wealth,” Jones said.
Gunter and Edwards also asked for an increase in online licenses.
“Increasing the number of online licenses would not only ensure there are ample online licenses for Class B license holders who are the class most likely to have MBE participation, but it would also lead to a market that is able to more quickly mature and generate the jobs, taxes and revenue that the state and its residents expect from this industry,” Gunter said.
Jason Tosches of theScore suggested increasing mobile licenses to 24. John Pappas, representing iDEA Growth, suggested that Maryland have at least as many online licenses as retail.