Maryland Sports Betting Won’t Benefit Problem Gambling Efforts

Posted on September 30, 2022 - Last Updated on October 4, 2022

The start of October marks the end of September’s Responsible Gaming Education Month. And while Maryland has made certain strides in establishing problem gambling initiatives, none of the state’s sports betting tax revenue goes toward such efforts.

Will the state’s current funding plan be enough to properly support responsible gambling once online sports betting officially launches in Maryland?

MD sports betting rules don’t include RG funding

When retail sports betting in Maryland launched in December 2021, the state established a specific set of rules for sportsbooks to follow. Some of these regulations were meant to protect the state, some to protect the consumer.

Meanwhile, other rules were intended to help Maryland sports bettors wager responsibly.

These rules include:

  • Sportsbooks can’t knowingly let those prohibited to bet, bet (36.10.11.08)
  • Sportsbooks must create a responsible gaming plan to address problem gambling (36.10.10.02)
  • Advertisements that encourage sports betting (online, on TV, billboards, etc) must include a gambling assistance message (36.10.10.03)
  • Sportsbooks may not share information that could personally identify a bettor or their gaming habits with any third party (except the Commission, law enforcement with a warrant, or a credit-reporting agency) (36.10.13.40)
  • Bettors must be able to create wagering limits, loss limits, and deposit limits (36.10.14.04)

Maryland’s current Problem Gaming Fund

The Maryland Department of Health manages the state’s Problem Gambling Fund.

Upon establishing MD sports betting, the government gave MDH the power to develop and implement free or low-cost gambling treatment. The MDH can also create prevention programs for those with gambling problems.

According to Maryland regulations, the purpose of the fund is to provide:

  1. inpatient and residential services;
  2. outpatient services;
  3. intensive outpatient services;
  4. continuing care services;
  5. educational services;
  6. services for victims of domestic violence; and
  7. other preventive or rehabilitative services or treatment

So, what are these “services” exactly? The Problem Gambling Fund is directed to:

  1. establish a 24–hour hotline that provides counseling services
  2. establish an outreach program for compulsive and problem gamblers

How much goes into the fund?

Unlike other states, Maryland does not allocate any sports betting tax revenue to its Problem Gaming Fund. Instead, the entire 15% tax on betting revenue goes towards the Blueprint for Maryland’s Future Fund, which is dedicated to improving the state’s public schools.

The only instance where a sports bet helps directly pay for problem gambling services is the rare occasion when a winning retail bet goes unclaimed. That money — once expired — is then sent to the fund.

As it stands, the casino industry is the primary supporter of Maryland’s fund. In fiscal year 2022, 0.2% of the industry’s $2 billion went to responsible gaming — a total of $4.4 million.

Once online sports wagering debuts, Maryland is positioned to see a substantial influx of bettors within state lines.

However, the Problem Gaming Fund will continue to receive the same 0.2% of casino tax revenue each year.

With no supplemental funding, Maryland’s current contributions could quickly prove inadequate once online sports betting takes off in the state.

How does Maryland compare to other states?

No federal rules exist as to how problem gambling issues should be addressed. Thus, each state has instated its own unique method for allocating funds.

Neighboring Virginia taxes sportsbooks at a 15% rate based on adjusted gross revenue. From that, 2.5% goes to the state’s Problem Gambling Treatment and Support Fund — just under $1 million total since launch in Jan. 2021.

And much like Maryland, Ohio will also be launching online sports betting in the coming months. The Buckeye State, however, plans to contribute 2% of its betting tax revenue to its Problem Sports Gaming Fund.

Meanwhile, Pennsylvania deposits a flat rate into its Problem Gambling Treatment Fund annually. Rather than supplying the fund with a percentage of tax revenue, the government appropriates $2 million to the fund each year.

Industry-wide responsible gambling initiatives

The sports betting industry has recently taken steps of its own to fortify responsible gambling efforts throughout the country.

In 2019, the American Gaming Association launched the “Have a Game Plan” initiative, intended to make sports betting education more accessible. The AGA partnered with the MLB, NHL, UFC, PGA, NASCAR, and several sportsbooks to publicize responsible gambling service announcements.

Last week, Bally’s Corporation, BetMGM, DraftKings, Entain, FanDuel, and MGM Resorts International all came together on a 12-point RG pledge of best-practice principles based on four core attributes:

  • We participate only in legal markets that provide consumer protections
  • We strive to instil responsible gaming culture throughout our respective businesses
  • All forms of online gaming should be a fun activity and enjoyed as a form of entertainment
  • While the vast majority of individuals can enjoy online gaming in a responsible way, some individuals need additional tools and support related to their gaming activities.
Photo by Abdullatif Omar
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Ethan Matthew

Ethan Matthew was born and raised in Silver Spring and has written articles for PlayVirginia and George Washington University's HNN. He also researched and wrote content for museum exhibits in both Boston and Washington, DC.

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