Industry

Sports Wagering Proposal On The Table In Maryland

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Maryland might be one of the states to watch on the sports betting front in 2020.

The state legislature begins its session on Jan. 8 with a single sports wagering proposal, Senate Bill No. 58, already on the table. The proposal, which calls for a voter referendum on the expansion of gambling, would lead to authorizing the Maryland Lottery and Gaming Control Commission to issue sports wagering licenses.

The referendum would take place in November 2020. SB 58, which comes from state Sen. Chris West, a Republican representing central and northern Baltimore County, is currently the only sports wagering proposal on file in the state. It’s not certain that a non-referendum sports betting bill will be filed in 2020.

Sports wagering licenses would be limited to holders of a video lottery operation license or a license for thoroughbred racing or harness racing. Those currently total 11 through existing casinos and racetracks.

The legislation dictates that the primary purpose of any new sports betting revenue would be to fund education in Maryland.

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“[I]t is the intent of the General Assembly that, if the voters of the State adopt a referendum that authorizes sports wagering in the State, the State revenues generated by sports wagering be used for dedicated purposes including the funding of public education,” states the proposal.

Just two pages in length, West’s proposal doesn’t lay out any details for the industry.

Third year in a row

Despite several years of discussion and work, plans for Maryland sports betting still appear to be in their infancy. SB 58 marks the third legislative session in a row that the Old Line State will look at allowing sports wagering. House Bill No. 1132, one of multiple gaming expansion proposals that failed to gain traction in 2019, did not call for a statewide referendum.

Some discussion in the state concerned classifying sports wagering as a lottery offering, which potentially could circumvent the need for a referendum under the state constitution. Maryland could opt for the referendum route, which could be more favorable for the brick-and-mortar gambling dens. A lottery offering could put some form of sports betting in thousands of lottery retail locations across the state.

The state of Ohio is currently grappling with a similar debate.

The path to Maryland sports betting under SB 58 existed in 2019 as Senate Bill No. 470.

Voters in the state have previously signed off on casino-gambling expansion in Maryland. Maryland’s first casino opened nearly a decade ago, and since then the state has incrementally bolstered its industry.

MGM National Harbor, the state’s largest casino in terms of gaming win, opened in late 2016 and injected rapid growth into Maryland’s total casino gambling market. The hot streak has cooled, as statewide casino gaming win of $1.6 billion through the first 11 months of 2019 was flat in a year-over-year comparison.

Online/mobile absent right now

SB 58 currently doesn’t make any reference to online/mobile. The situation is very fluid, however, so that could change. Additionally, other proposals will likely hit the table in Annapolis.

Recently, Colorado saw a successful referendum to allow both retail and online/mobile sports betting.

Online/mobile could become a major topic of debate within the context of Maryland sports betting. The owner of one of the state’s top Las Vegas-style casinos is wary of online gambling, going so far as to call online/mobile sportsbooks potentially a “big mistake” for the state.

The likes of MGM, Caesars, and Churchill Downs also do business in the state, and all three casino companies are in support of online/mobile gambling in other jurisdictions.

The casino industry argues that states should allow online/mobile in order to help legal sportsbooks compete with offshore, unregulated platforms. Though sports betting doesn’t provide much tax revenue for states, online/mobile can grow the gaming tax monies for state coffers. For example, around 86% of the total sports betting handle in New Jersey comes via the internet.

According to a 2017 study from Oxford Economics commissioned by the U.S. casino industry, Maryland could see $4.7 billion in annual handle and $335 mm in additional annual gaming revenue under a market with online/mobile and a 15% tax rate. Per that casino industry study, the Maryland handle would fall to $1.1 billion and $76 mm in win if sports betting was only allowed in a retail setting.

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