Maryland Embraces Wide-Open Market As Sports Betting Bill Advances to Senate Floor

Posted on April 7, 2021

For any online sports betting operator that finds itself unwelcome in New York, Maryland is waiting with open arms.

The same day New York agreed to a restrictive mobile sports betting model, a Maryland Senate workgroup unveiled a sports betting plan limited only by imagination.

Responding to pleas that the current cap on mobile sports wagering licenses could prevent the participation of minority-owned businesses, the group pitched removing all limits for retail and online licenses.

“We were doing our best to not pick winners and losers but to let the market work itself out,” said Sen. Craig Zucker, who lead the workgroup. “There might be places that we do not know about that wants to try to get a brick and mortar license or a mobile license, and this allows them the opportunity to do that.”

The Maryland Senate Budget and Taxation Committee provided a favorable as amended report to H 940 late Wednesday. The bill should reach the Senate floor Thursday.

New licensing structure for Maryland sports betting

Sponsored by House Speaker Adrienne Jones, the sports wagering bill passed overwhelmingly (130-9) in the House of Delegates last month.

When it entered the Senate committee, the bill limited Class B retail licenses to 10 and mobile licenses to 15. At a committee hearing two weeks ago, some asked for at least 22 mobile licenses to encourage minority participation.

The new Senate proposal takes it a step further with a tiered structure for licensing and fees:

  • Class A-1: Casinos with 1,000 or more machines, Horse racetracks, and major professional sports facilities. They pay a $2 million license fee (renewable every five years for $500,000) and a 15% tax rate.
  • Class A-2: Casinos with less than 1,000 machines. They pay a $1 million license fee (renewable every five years for $300,000) and a 15% tax rate.
  • Class B-1: Those who fit this license but are not small enough businesses for B-2. They pay a $250,000 license fee (renewable every five years for $50,000) and a 13% tax rate.
  • Class B-2: Entities with fewer than 25 employees and $3 million in gross receipts. They pay a $50,000 license fee (renewable every five years for $10,000) and a 13% tax rate.
  • Mobile license: Any entity that qualifies can pay a $500,000 license fee renewable every five years for $100,000 and a 15% tax rate.

“I think there was a lot of concern with smaller bidders that the big guys would suck up all the licenses and there would only be two-to-three left, and 100 people fighting for three licenses,” Sen. Doug Peters said. “So what we figured is let’s let the market determine what happens.”

More Senate changes proposed Tuesday

Sen. Matthew Bennett explained additional changes to the Maryland sports betting bill thought up by the workgroup:

  • Creating a fund administered by the Department of Commerce to help disadvantaged businesses get into the sports wagering market. Five percent of revenue from Class A licenses goes to this Small, Minority-Owned and Women-Owned Businesses Fund.
  • Professional sports stadiums and race tracks may offer sports betting every day, not just on game/race days.
  • One potentially problematic addition by the workgroup urges the Sports Wagering Application Review Commission to give online sports betting operators that partner with small, minority- and women-owned businesses a head start into the market. “The internet here for the workgroup was that the market should be open for some period of time, probably the first year, for those types of businesses that we’d like to see get a head start,” Bennett said.

Maryland sports betting bill set to move fast

With the Maryland legislative session set to end Monday, lawmakers are preparing H 940 to move quickly. Legislators are answering the call of Maryland voters, who legalized sports betting through a referendum in November.

Committee chair Guy Guzzone took a show of hands Tuesday that the bill, as amended by the workgroup, would pass.

But the amendments still needed to be drawn up officially. That happened overnight. During Wednesday’s meeting, several tweaks were discussed to apply to the bill before it reaches the floor.

If it gets a successful Senate floor vote, the legislation would need to go back to the House for concurrence. All by Monday. Then it would head to the desk of Gov. Larry Hogan for approval.

Zucker is optimistic that Maryland will pass the sports betting implementation language this session.

“The one thing I can say is that this group is going to get it done, this committee is going to get it done, and we’re going to get sports betting accomplished this session.”

Photo by Marian Kostjuk | Dreamstime.com
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Matthew Kredell

Matthew has covered efforts to legalize and regulate online gambling since 2007. His reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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