House and Senate leaders reached a compromise leading to passage of Maryland sports betting legislation Monday, the last day of the legislative session.
The Maryland Senate moved H 940 back to second reading early afternoon to substitute the agreement. The Senate then passed the bill on third reading by a 47-0 vote.
Upon receiving the bill back from the Senate Monday afternoon, the House Ways and Means Committee met to approve the changes. The House voted 122-16 to concur with the Senate revisions early in the evening.
“It’s the case of a typical compromise,” said Del. Anne Kaiser, chair of the House Ways and Means Committee. “We didn’t get everything we wanted, but we believe that we’re creating a good legal process here and that we’re creating great opportunities for MBEs.”
Maryland sports betting agreement adds license cap
The most significant compromise in the new language caps mobile licenses at 60. It also limits Class B retail sports betting licenses to seven named facilities plus 30.
The cap presents a middle ground between the previous proposals in each chamber. The Senate had created limitless licenses in an effort at inclusion. The House preferred a mobile limit of 15 and Class B limit of 10 in the bill it passed.
Then new limit still leaves the possibility for more online sports betting sites than any state in the nation.
“I think we’re opening it up pretty wide so these licenses never become so valuable that they are brokered in the future,” Del Eric Ebersole told PlayMaryland. “We have a lot of licenses available. Some will survive and some won’t, but that’s the way capitalism and this business works.”
The substitute lays out some specific entities expected to apply for Class B licenses. These include:
- Maryland State Fair
- Four off-track betting parlors
- Commercial bingo facilities with at least 200 electronic bingo machines or tip jar machines.
An additional 30 Class B licenses are up for competitive bidding and could include bars and restaurants.
Ensuring minority participation key part of Maryland bill
Increasing the cap for mobile sports wagering and Class B licenses was part of a session-long effort by both chambers to ensure participation in the state’s new sports wagering industry from MBEs (minority business enterprises).
Owners of MBEs urged lawmakers to increase mobile licenses in particular. They expressed concern that casinos, racetracks and sports teams take up 12 of the 15 licenses in the House bill. That could have left only three for MBEs to fight over.
The substitute even adds language to reevaluate the cap if it proves restrictive. The amendment instructs the commission to report to the General Assembly by December 2025 on:
- The racial, ethnic, gender and geographic diversity of holders of Class B-1 and B-2 sports wagering facility licenses and mobile licenses.
- The level of market saturation of sports wagering in the state.
- Whether the number of Class B or mobile licenses should be increased to address the demand for sports wagering in the state.
Del. Darryl Barnes, chair of the Maryland Legislative Black Caucus, lauded the bill:
“This is one of the strongest bills in the country with the language that we put in to ensure minority participation, equity and inclusion, and creating generational wealth. I feel more than confident that minorities will have an opportunity to participate in yet another multimillion-dollar industry coming before the state of Maryland because of the work that this committee has done.”
Additional changes in Maryland sports betting bill
The substitute provides one tax rate of 15% for all participants. Previously, Class B licensees paid 13%.
Class A licenses in the bill go to Maryland’s six casinos, Maryland Jockey Club (Pimlico Race Course and Laurel Park) and major professional sports teams/stadiums.
The latter includes the Baltimore Ravens, Baltimore Orioles and Washington Football Team. However, the new language optimistically adds NBA, NHL and MLS teams. Maryland doesn’t currently have any teams in those leagues.
“The NHL, NBA, MLS language is just seen as a potential enticement for a team that wanted to come to the state of Maryland,” Kaiser said.
Additionally, before July 1 of each year, each licensee must report to the commission on the number of minorities and women it employs and who have an ownership interest.
Time frame for Maryland sports betting launch
The Maryland sports betting bill now heads to the desk of Gov. Larry Hogan, who is expected to sign it into law. Hogan supported the referendum last year through which Maryland voters legalized sports betting.
Once H 940 becomes law, it’s up to the Maryland State Lottery and Gaming Control Commission to promulgate rules and regulations. By making it an emergency bill, the Senate helped make this process go more quickly.
However, setting up such a complicated selection process with so many licenses could slow down the Maryland sports betting launch.
Discussion among lawmakers in the Ways and Means Committee indicated that brick-and-mortar sports betting should be up and running fairly quickly. Lawmakers hope the first sportsbooks could open this fall.
“The chair of the committee said she’d like to see [it in time for] football season, and I’m in concurrence with her,” Ebersole said. “Early September is a good goal for us.”
Mobile is a different story. The Sports Wagering Application Review Commission (SWARC) set up in the bill must first analyze disparity studies conducted on the Maryland gambling industry to determine what, if any, remedial measures to take to ensure minority participation.
The Senate also added language asking SWARC to consider allowing early access to the mobile wagering market to entities with a meaningful partnership with women, and minority- and women-owned businesses. In a Senate workgroup, lawmakers suggested these companies get a one-year head start in the mobile market.
“I think brick and mortar is a great introduction to sports betting,” Ebersole said. “People can get used to it before it comes out on their phones. Then I think slowly we’ll see them coming online, and people will get used to that too. I think it’s a great way to roll it out.”
