Battle Lines Clear For Maryland Online Casino Legislation

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Maryland online casino

Lawmakers spent hours last week hearing from Maryland online casino proponents and opponents with no clear outcome moving forward. 

Last Monday, the House Ways & Means Committee spent more than five hours on House Bill 1319. On Wednesday, the Senate Budget and Taxation Committee discussed Senate Bill 565 and Senate Bill 603 for two hours. 

Both bills contain similar language legalizing online casinos in Maryland. Neither committee voted on the bills after hearing testimonies drawing clear battle lines on the issue.

House sponsor talks up online casino

House sponsor Rep. Vanessa Atterbeary said she does not go to casinos except for occasional shows but might use online gaming. She said the online casino revenue will be key to supporting the state’s educational funding, known as Project Blueprint

 “Contrary to what you may have heard, the sky will not fall if iGaming is implemented in the state of Maryland,” said Atterbeary, who is also chair of the Ways & Means Committee. “Problem gamblers are going to find a way to gamble, as we have already seen. It is our job to create the appropriate protections, increase support and funding for treatments for those individuals.”

Atterbeary’s bill creates 12 online casino licenses and taxes the industry at 55%, or 20% for live dealer games. While the legislation does not tie the licenses to the six casinos in the state, she said that is the intention.

Senate bill similar in Maryland

Sen. Ron Watson has led the charge for online casino in the other chamber.

His bill includes 12 licenses for the six casinos and a 47% tax rate. There would also be five additional licenses for Maryland-based businesses.

During the hearings, small gaming operators Long Shots and Riverboat-on-the-Potomac asked for licenses. Those facilities, and several others, were added to the sports betting licensing process.

Four Maryland casinos support online casino

During the hearings, four casinos supported the issue: 

“I would not be up here if I thought there would be job loss,” Horseshoe Baltimore general manager Randall Conroy said. 

Instead, the casino representatives said the product would be complementary to the in-person offerings. They also said their companies’s casinos in New Jersey and Michigan have seen reinvestment since iGaming launched.

Two casinos speak against

Bobbi Jones, general manager at Ocean Downs Casino and Racetrack, said Churchill Downs has experienced a 45% decline in revenue at Presque Isle Downs in Pennsylvania since iGaming began in 2019. Jones said the revenue at Presque Isle was down 15% last year, however, that dip was in conjunction with Churchill Downs shutting down its online operations.

While casino companies might see large revenue gains, Cordish Companies general counsel Mark Stewart said that is not worth the “bad deal for Maryland.”

“Thousands of people in Maryland will lose their jobs,” Stewart said. “Even more employees could be impacted by the tightening of wages and reduced benefits.”

Online casinos the next Amazon? 

Stewart said the addition of online casinos to Maryland will cause small brick-and-mortar gaming facilities to close. 

He used a report that cited the closure of 30,000 retail businesses because of online retail expansion.

Dozens of workers from casinos testified, fearing online iGaming could cost them their jobs.

Casino supplier on board

Multiple industry representatives talked up the positives of a regulated online casino industry. Howard Glaser, global lead of government affairs and legislative counsel at Light & Wonder, said it will be crucial for land-based casinos to survive.

“There are reports on both sides you hear and there are concerns, and we have a stake in this,” Glaser said. “Our conclusion as a land-based company is that opening the digital channel is essential for brick and mortar to thrive and compete in the long term, particularly against other online entertainment channels. Fast forward, the casino without the ability to be online is a casino that will be in trouble.”

Differing online casino reports in Maryland

Lawmakers reviewed multiple studies on online casinos, including one commissioned by the Maryland Lottery. In that study, The Innovation Group estimates a $221.1 million annual loss in revenue at land-based casinos, despite a $921.1 million gain in online gaming revenue.

Eilers & Krejcik responded to that report, finding land-based casino revenues in the six legal online casino states ticked up 2.44%. Representatives from iDEA Growth, which commissioned the EKG study, said job loss at in-person casinos is attributed to Covid shutdowns.

Meanwhile, the Anne Arundel Chamber of Commerce and the Sage Policy Group suggest online gaming would lead to up to 2,700 fewer jobs a a 26% loss in land-based revenue. Sage CEO Anirban Basu said the online casino could lead to a net negative fiscal impact for Maryland when factoring in taxes from payroll and sales from the loss at land-based casinos.

Last week, the Maryland Retailers Alliance and Public Policy Polling released a study that showed 64% of Marylanders oppose online casino legislation.