Members of Maryland’s Sports Wagering Application Review Commission met Friday to hear public comments on the state’s proposed sports betting regulations.
With online sports betting finally on the way, mobile licensing fees and the inclusion of minority-owned businesses appear to be two issues of primary concern.
Maryland sports betting regulations overlook the underdogs
The race to launch mobile Maryland sports betting before the Super Bowl continues at full speed now that the state’s 45-day sportsbook application window and a 30-day public comment period are now open. But the Maryland public seems to think some groups are getting left in the dust.
Aspects such as Maryland’s substantial licensing fees are making it difficult for smaller businesses to own and operate mobile sportsbooks, according to members of the public.
According to Maryland’s proposed regulations, the licensing fee for brick-and-mortar sportsbooks is tiered based on applicant size. B-1 Facilities (those with more than 25 employees, or $3 million in “gross receipts”) must pay $250,000. And B-2 Facilities (those with less than 25 employees, or $3 million in “gross receipts”) receive a significantly lower fee of $50,000.
Meanwhile, all mobile operators — regardless of company size — must pay a healthy $500,000 fee upon application submission.
Arthur C. Robinson, CEO of Full Circle Solutions, Inc., noted the hurdle this hefty mobile licensing fee creates for small businesses. As a solution, he suggested SWARC make the fee refundable for companies who don’t ultimately receive a mobile license. Additionally, he noted that mobile licensing fees should be tiered in a manner similar to retail licenses, dividing applicants into multiple classes and fee tiers.
In order to open the application process up to smaller businesses, Robinson suggested offering an initial round of licenses at a fee of $500,000. Once granted, the SWARC could then open a second application window, offering mobile licenses at a reduced fee.
Attention to minority and women-owned businesses falls short
Maryland sports bettors have waited months for mobile betting to launch. Most recently, progress was delayed by a disparity study intended to report on the particular challenges that minority- and women-led businesses face when entering the betting industry. After some time, the study concluded without any substantial findings.
In an effort to incorporate some type of guideline, SWARC decided to task applicants with meeting certain diversity requirements.
The regulations note that companies looking for investors must make an effort to bring on minority or women investors “if applicable.” Instead, Robinson challenged SWARC to better define this section by making these efforts a specific requirement.
This emphasis on investor diversity was certainly a helpful step in the right direction. Robinson noted, however, that these regulations once again failed to offer any assistance to minority- and women-owned businesses interested in operating a sportsbook.
“Nowhere in this language does it encourage women- or minority-owned businesses as a sportsbook operator. It only talks about being an investor or support services, which are good. But why was being a mobile sportsbook or operator not specifically mentioned?”
“Small and minority-owned businesses are the backbone of the Maryland economy. And this reads as though we are an afterthought to the mobile sportsbook or operators. We are willing to partner and work with anyone. But the state should not make it hard for us to do it on our own. The choice should not be taken away from minority- or women-owned businesses to be a sportsbook operator or to own a mobile sportsbook.”
Washington Commanders sportsbook agreement
Friday’s public meeting also revealed an agreement between Hamilton Hall Real Estate and Maryland Stadium Sub, LLC (MSS), a company created by Washington Commanders owner Dan Snyder.
Hamilton Hall founder Charles Hopkins detailed the arrangement. His company would “participate meaningfully in 25% of all revenue realized by MSS’s facility license”. As such, Hopkins requested the SWARC to amend regulation .19 (Ownership Criteria) by adding the bolded section:
A. SWARC may not award a license to an applicant that has not demonstrated direct or indirect ownership or similar economic interest, of not less than 5 percent by individuals with personal net worth of less than $1,847,000 each
Hopkins’ comments serve as further proof that Commanders fans will soon be able to wager on their mobile devices and from a retail sportsbook at FedEx Field.
MD mobile sports betting could launch this NFL season
Maryland’s public comment period extends through Sept. 26, during which time the public is able to submit comments to SWARC in writing. Meanwhile, the SWARC will consider making adjustments to the state’s final regulations based on those voiced concerns.
The application period for interested operators closes on Oct. 21, at which point the SWARC then has 45 days to review applications and award licenses.
This timeline suggests Maryland could very well be celebrating the launch of mobile sports betting before Christmas.
