Maryland Online Sports Betting

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Maryland voters on Nov. 3 voted “yes” to sports betting, paving the way for lawmakers to develop a framework and, ultimately launch live legal sports betting. Maryland is the final Mid-Atlantic state to legalize sports betting, and the referendum that did so does little other than legalize sports betting and name the Maryland Lottery and Gaming Commission as the regulator. 

In May 2021, legislators passed a bill that would allow up to 60 mobile operators and specifically spells out 17 gambling entities that are currently in the gambling and/or sports industries  that would be eligible for a retail sports betting license. These entities include current casinos, sports teams, racetracks, off track betting locations and bingo halls. The 60 mobile operators would partner with the brick and mortar betting locations in order to offer mobile betting in the state.

Anything can happen, as we have seen in other states, but don’t expect mobile betting in 2021. Retail sports betting may be a reality before the Ravens kick off their NFL season, but with the details of the law not yet hammered out, it could change several times before bets start being placed.

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Maryland sports betting timetable

Under the new law, the state’s casinos and racetracks will be in the first wave of eligible locations to house brick-and-mortar sportsbooks. It’s also looking like stadiums like the Washington Football Team facility and bingo halls in the state would also gain access to a sportsbook. There is also language in the law that would allow for bars and restaurants access to retail sports betting licenses. 

When mobile sports betting does roll along, there will be a $500,000 license fee and there will be a 15% flat tax for both online and retail. This is one of the more operator friendly tax rates in the country, as we have seen a monstrous tax levied on gambling in Pennsylvania of 36% and a slightly lower tax rate in New Jersey of 13%. Regulatory authority to carry out the law will be placed with the Maryland Lottery and Gaming Control Commission, which already oversees the state’s casinos.

Given the time it would take to complete the legislation, regulations, and licensing, it wouldn’t be out of the picture to be placing bets at your favorite casino by kickoff of the 2021 NFL season, but that may be a bit optimistic. Online betting at a nationally known online site such as FanDuel or DraftKings may take a bit longer, but not out of the picture to be betting from your couch on Super Bowl Sunday 2022.

Some sportsbook operators obvious, others less so

With up to 60 licenses up for grabs, you will likely see all the big names coming to Maryland. Some educated guesses can be made, based on ownership of the state’s six casinos and its five race courses, based on owners’ prior agreements with sports betting operators in other states.

Potential online sportsbookPhysical CasinoOwnerCasino Location
BetMGMMGM National HarborMGM Resorts InternationalOxon
FanDuelLive! Casino and HotelThe Cordish CompaniesHanover
William Hill/CaesarsHorseshoe CasinoCaesars EntertainmentBaltimore
William HillRocky Gap Casino ResortGolden EntertainmentFlintstone
BetAmericaOcean Downs Casino & RacetrackChurchill DownsBerlin
Barstool Hollywood PerryvilleGaming & Leisure Properties (Penn National)Perryville
TBDTimonium OTB at Maryland State FairgroundsMaryland State FairTimonium
FOX BetLaurel ParkStronach GroupLaurel
TBDRosecroft RacewayStronach GroupFort Washington
TBDPimlico Race CourseStronach Group
TBDFair Hill FairgroundsCecil County Breeders' Fair, Inc. /Fair Hill RacesElkton

Some of those sportsbook operators are clear-cut, such as in the case of MGM and Churchill Downs operating their own books across their properties. The Cordish Companies established a relationship with FanDuel last year through the Baltimore-based company’s Pennsylvania properties. Golden Entertainment, based in Las Vegas, has had agreements there and for its properties elsewhere with William Hill, which was recently rebranded as Caesars Sportsbook.

Hollywood Casino’s owner is a spin-off from Penn National Gaming, setting up potential use of that company’s new Barstool-branded app, which debuted in Pennsylvania in September.

Horseshoe Casino will bring the new and improved Caesars Sportbook app to Maryland as soon as online sports betting is approved and ready to go live. 

And then there’s the case of Maryland’s horse racing tracks, three of which — Pimlico, Laurel Park, and Rosecroft Raceway — have the same owner, the Stronach Group.  Those tracks and the Maryland State Fairgrounds racetrack are all expected to be licensed for sports betting. National operators with no clear connection to the casinos — DraftKings, PointsBet, BetRivers, and FOX Bet, among others — could all compete for the rights to one of the racetracks’ skins to conduct online betting. The same holds true for them if the Washington Football Team emerges with the right to a sportsbook license.

The details of just whom enters the state, and in partnership with whom, will be as interesting to follow in Maryland as it has been in other states, where competition has been intense to enter the new markets in time to be among the first operators to get started.

There is some concern from legislators about the overabundance of licenses being offered, and to whom it may attract. In Tennessee, there were some issues with a sportsbook called Action 24/7, where the inexperienced sportsbook ended up in hot water for allowing some financial transactions that could be deemed a bit shady. The number of licenses may eventually shrink as the details are hammered out, but for now, it seems as though they are going by the old adage of “the more the merrier”.

Trying to play catch-up with Virginia and D.C.

Some states, such as neighboring Virginia this year, have been able to legalize sports betting through legislation, but Maryland needed a constitutional amendment.

That prompted lawmakers to authorize a general election referendum with the following question, known as Maryland Question 2:

“Do you approve the expansion of commercial gaming in the State of Maryland to authorize sports and events betting for the primary purpose of raising revenue for education?”

There was no vocal organized opposition, while the “pro” side was heavily promoted in a marketing campaign funded by DraftKings and FanDuel, which compete as online market leaders in many states.

With a majority vote of approval, the state joins its neighbors in Delaware, in West Virginia, Pennsylvania, and Washington, D.C., which all already have sports betting taking place, and Virginia, where regulators are expected to complete the licensing process in time for sportsbooks to open in early 2021.

Before the state legislative session came to an abrupt halt in March due to COVID-19 concerns, the Senate unanimously approved a bill that both called for the referendum and spelled out various details of how sports betting should be carried out in the state. With the House of Delegates lacking time to reach any consensus of its own on specifics and act, legislative leaders opted to strip the measure to a bare-bones question placed before voters to give sports betting a chance to progress this year.

The voter referendum passed with flying colors in November, where we saw more than ⅔ of the votes were in favor of allowing sports betting. This led to the bill being passed that made sports betting legal as of June 1, 2021. There are several more hurdles to get over before the first bet is placed. 

Details of the bill

  • Up to 60 mobile licenses opening the door for all the big names to enter the market.
  • Licenses are $500,000 each.
  • 15% flat tax rate on both mobile and retail sports betting.
  • Casinos, horse tracks, OTB parlors, restaurants, bars and bingo halls are all eligible for retail sports betting.
  • Mobile sportsbooks would need to partner with a retail sports betting license holder in order to operate in the state.

Casinos, horse racing set the stage for sports betting

While Maryland could just be catching up to surrounding states with sports betting, it has a strong history of supporting legalized gambling.

The first casino opened in 2010 as a result of the 2008 referendum, which authorized only video lottery terminals at five locations. By 2012, state officials put forward another referendum that passed, this time to add table games at the existing properties and authorize development of a sixth casino in Prince George’s County. That casino, MGM National Harbor, quickly became the state’s largest upon opening in 2016.

Combined, the casinos’ revenue has reached nearly $1.8 billion annually, although it was closer to $1.3 billion in the 2019-20 fiscal year due to forced closures in the spring in connection with the COVID-19 pandemic.

Long before the casinos’ arrival, Maryland’s status in gambling annals was cemented through horse racing and the famed Preakness Stakes at Pimlico Race Course in Baltimore, long the second leg in thoroughbred racing’s Triple Crown. (It became the third leg in 2020, however, due to COVID-related rescheduling, with longshot filly Swiss Skydiver winning in the 145th running of the race Oct. 3.)

Pimlico, which has a grandstand seating nearly 100,000 spectators, opened in 1870 with a main stakes race that was won by a horse named Preakness on its mile-long oval track. Three years later, that featured annual stakes race was named in honor of the colt.

Due to Pimlico’s deteriorating condition in recent years, there was a chance the Preakness would no longer be held there each May. That threat was erased by the legislature this spring, however, through approval of the Racing and Community Development Act of 2020. The measure authorizes issuance of bonds of up to $375 million to finance improvements to both Pimlico and its sister track, Laurel Park.

Talks began even before legalization was possible

While this was the first time the sports betting question was put before voters, the topic has been bandied about by lawmakers since even before the 2018 Supreme Court ruling made legalization feasible for the state.

In March 2018, the House voted 124-14 to put a similar referendum on the November ballot that year, but the Senate never acted on the proposal. The House action came at the time the Supreme Court’s decision hadn’t yet been made, but was along the lines of similar legislation that had been approved in Pennsylvania, authorizing the legalization in the event the high court ruled in favor of New Jersey’s quest to let states decide their own fate.

There was some indication at the time that Maryland residents were already on the side of sports betting, as a Washington Post poll of registered voters in the state in 2018 found 53% of them favored legalization — at least for pro sports — while 37% were opposed and 10% had no opinion.

The legislature revisited the issue in 2019, with some discussion of a potential bypass of the constitutional amendment requirement by putting the Maryland Lottery in charge of operating sports betting, as some states have done. That could have hastened the time frame for legal sports betting, as referendums are allowed only in even years in Maryland, but state leaders decided that would not be the best option and put the matter off until this year’s action.