Maryland Bill Has Promising Elements
Legal Sports Report

Maryland Sports Betting Bill Praised With One Notable Exception

Maryland sports betting

After hearings in the Senate and House, it appears most Maryland sports betting proponents are behind a bill that would offer multiple online licenses.

The House Ways and Means Committee heard input Tuesday on HB 169 and HB 225. There was a similar lineup of people to talk on the bill as there was at last week’s Senate hearing on SB 4 and SB 58.

The main difference between the two hearings is that HB 225 is the most complete bill out of all four. The Senate bills are currently part of a workgroup to get more feedback moving forward.

The House also boasted the fact that it passed a Maryland sports betting bill in 2018 to try to beat the end of PASPA, which came that May. The Senate, however, did not move the bill forward.

Maryland sports betting would be robust

HB 225 is the clear favorite for most of the industry aside from a couple of casino operators.

The bill would allow for a total of 16 online sports betting licenses. That would give two to each licensee, which includes the six casinos and the thoroughbred tracks at Timonium and Pimlico and Laurel Park. Pimlico and Laurel Park, owned by Stronach Group‘s Maryland Jockey Club, would share the licenses.

Retail sportsbooks would also be allowed at the casinos and tracks. One of the online licenses would be for a property-branded sportsbook while the other could be for any brand.

Nearly all in attendance praised Del. Eric Ebersole for the inclusion of multiple online licenses in his bill. Some called for the MD sports betting bill to be expanded even more to include the state’s four off-track betting facilities.

Not all want MD sports betting as wide as possible

Unsurprisingly, not everyone in attendance agreed the tracks should be involved.

Marta Harding, representing Cordish Cos. Live! Casino, suggested Maryland sports betting should only be operated through the casinos.

This isn’t a new argument for Cordish, which had a similar thought process in 2018. This year, however, the casino is open to allowing mobile betting, Harding said. Cordish could market to the customers betting online to draw them into the casino, she added.

Cordish essentially believes the state will benefit more by keeping sports betting only at casinos due to the spillover play by sports bettors into table games and slots, Harding said. The company estimates that play would amount to as much as $115 million in annual revenue.

Kerry Watson of MGM Resorts offered a suggestion he called a “reverse OTB” model. This would let the casinos license out its sports betting operations to tracks and OTBs.

Washington Redskins interested

While the Redskins might tout Washington, D.C. as their home, FedEx Field is actually located in Landover, MD.

Naturally, the Redskins want in on the action just like sports venues are getting in the District.

Redskins representative Justin Ross said the team would commit to building a year-round facility for sports betting.

The license should naturally go to the landowner, but Ross said the team is willing to play ball to get included in the bill. Involvement of Minority Business Enterprises was a popular talking point for some of the delegates and Ross guaranteed that was a possibility.

“We will also commit publicly, as a part of this bill and a condition to us receiving a license, to offer [MBE] equity participation in this opportunity.”

Concern over taxes and fees

The only main gripe that everyone in the industry agreed on is the tax and fee structure of HB 225.

Maryland would tax sports betting revenue at 20%, the same as table games. There would be a $2.5 million application fee and a $250,000 annual license fee.

That structure would put Maryland in the top three highest states.

Many argued for the tax to be lowered to around 10%. That was also the recommendation of Gordon Medenica, director of the state’s gaming regulator.

Fees likely wouldn’t deter entry

Sarah Koch, director of government affairs for DraftKings, was one of the industry speakers that called for lower taxes and fees to ensure DraftKings could offer odds competitive with black-market operators.

Anne Kaiser, the chair of the Ways and Means Committee, then asked if DraftKings would bid on a license if the tax and fee structure remained the same.

“We’re very excited to enter the market,” Koch answered.

Maryland likely will require a trip to the ballot to ultimately legalize sports betting.

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- Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.
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