How Inclusion Concerns Led To Gutting Of Maryland Sports Betting Bill

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Maryland sports betting

Concerns over the lack of women and minorities in ownership positions of potential licensees led to the removal of the implementation language from the Maryland sports betting bill passed Wednesday.

Members of the Legislative Black Caucus expressed concerns that led to the fully formed legislation becoming merely a referendum that will go in front of voters in November. Del. Nick Mosby was outspoken about the matter on the House floor.

Mosby tells Legal Sports Report that he had an issue with awarding Maryland sports betting licenses solely to those who currently run gambling operations and other companies that would benefit from the bill:

“They basically wanted to give these new sports wagering licenses to owners of racetracks, casinos and professional sports stadiums. When you look at those industries, there’s zero diversity when we talk about women and minorities. Adding to the concentration of wealth for individuals based on the current landscape is not a stance we should take …

“When you (assign) sports wagering licenses to businesses where minorities aren’t represented, you’re automatically ensuring sports betting never has any type of diversity in Maryland. When you open it up to a competitive marketplace, you open it up for the opportunity to have diversity.”

Underrepresented communities in MD sports betting

Mosby emphasized that he’s talking about the opportunity for women and minorities to be in primary ownership positions for companies with sports wagering licenses.

So what sort of companies could get involved in offering sports betting in Maryland outside of the gaming entities that would typically be involved?

Mosby said that would be determined following the disparity study that the House amended into the bill.

What’s in the study?

It requires the Maryland Department of Transportation and the State Lottery and Gaming Control Commission to commission a review of whether minorities face a disadvantage in participating in the industry.

“The disparity study will show us if there’s been any disadvantage for women and minorities to have access to this bustling industry,” Mosby said. “If there has, we’ll work to develop a competitive program that factors in those disadvantages and hopefully pushes for more diverse people as sports wagering license holders then what we currently have.”

But Mosby doesn’t agree that sports wagering license holders need to be experienced gambling operators.

“Since we know there’s no real skill set needed in developing an agreement with third parties like FanDuel or DraftKings, maybe there’s minority- and women-owned businesses out there that can apply to do it. These third-party companies are the subject-matter experts in the field who do all the heavy lifting. They turnkey, set it up for you.”

Coronavirus had little to do with changes to bill

Maryland ended its legislative session Wednesday, three weeks before scheduled due to the coronavirus concerns.

Mosby indicated that even if Maryland didn’t have its legislative session cut short, he didn’t think the legislature would have been able to work out the issues with the bill in the next three weeks.

“I talked to folks about this since the beginning of the session, that this was a concern of mine with the bill,” Mosby said.

The Senate did try to address concerns of the caucus in S 4 by earmarking 5% of the tax revenue collected by the state from sports betting to the minority business enterprise program. The Washington Redskins also promised to partner with a minority-owned firm to run sports betting at a potential stadium.

Mosby would like to see more effort on the matter.

“Whenever you deploy a new license, that’s going to be a revenue generator, not only for the state but the individual license holders. It should be done in accordance to some kind of competitive process,” Mosby said.

Future of Maryland sports betting

As a result of S 4’s passage, the question of whether Maryland should legalize sports betting will be on the ballot in November. Constitutional concerns about gambling expansion needing voter approval meant Maryland voters always were likely to have a say.

If voters approve the referendum, that will give the legislature a directive to figure out how to properly implement sports betting in the state and pass another bill next year.

Although there is talk of a special session in Maryland later this year to address unfinished business, Mosby expressed doubt that sports betting could be done in a special session because the disparity study isn’t due back until Oct. 1.

Del. Eric Ebersole, who was pushing for a fully formed sports betting bill in the House, said that he sees this as a six-month delay to getting legal sports betting started in Maryland. The Free State could still have regulated sports betting by the start of the 2021 NFL season.

“If we don’t get it done in a special session, and that won’t be the focus of a special session, we can pass it next session and make it fall into law on July 1,” Ebersole said.