Maryland sports betting continues its “positive momentum” toward a “late fall launch,” according to a top regulator.
Maryland Lottery and Gaming Control Agency Director John Martin used those words Tuesday as he briefed the Sports Wagering Application Review Commission. SWARC is an appointed board tasked with awarding licenses before the MLGCA performs background checks and issues the licenses.
SWARC met for the second time as it works to establish guidelines to award up to 90 competitively bid licenses for Maryland sports betting. The commission met for the first time in August when it passed the 17 entities named in sports betting legislation to the license application process.
Maryland sports betting ready this fall?
The license application process for those 17 named entities opened Sept. 14. Representatives from those entities are working with MLGCA staff on their background checks.
Those designated licensees include:
- Six casinos
- Six off-track betting locations and bingo halls
- Three professional sports teams
- Two horse racing tracks (sharing a license)
- Maryland State Fairgrounds
While the designated licensees are moving forward, Maryland sports betting regulations are in a 30-day period of public comment. There was a public meeting Wednesday before the period closes Monday.
Martin hopes final regulations can be in place by early November and the 17 retail licenses can be issued to “continue the positive momentum to get sports wagering operational by late fall.”
There are 60 mobile licenses available for competitive bid, which retail licensees can also win.
Obligations for license applicants
Maryland Department of Legal Services Policy Analyst Matthew Bennett took SWARC members through various costs and requirements for obtaining a license.
There are up to 30 Class B licenses up for competitive bid for local businesses. The sports betting legislation dictates SWARC gives preference to minority- and women-owned businesses.
Obligations outlined by Bennett include:
- License application fees
- Background investigation
- Licensing cost for employees
- Performance bonds
- Surveillance equipment and technology
- Record keeping infrastructure and accounting controls
- Security costs
“As the [MLGCA] has said along the way, they realize these entities are varying sizes,” Bennett said. “If some regulations seem onerous, it’s important to know they can reach out to the lottery and there are options for the lottery to consider for modifications to be made along the way.”
Assistance fund for new entrants
Department of Commerce Finance Programs Accounting and Administration Director Darla Garrett updated SWARC members on assistance some applicants might be able to use.
Garrett outlined the three grant types that minority-owned businesses can qualify for through the Small, Minority-Owned Business Sports Wagering Assistance Fund. Class A license fees contribute to the assistance fund.
Sports betting license support
The assistance fund can reimburse up to 50% of license fees and background checks up to $25,000.
License fees:
- B-1: $250,000
- B-2: $50,000
- Mobile: $500,000
Class B-2 licenses are for establishments with fewer than 25 employees and less than $3 million in annual receipts.
Sports betting operating and training support
The two other grants under the Sports Wagering Assistance Fund go toward sports betting operating support and training. Those grants can reimburse up to 50% of eligible costs up to $50,000.
Operating costs include items like software, IT support and marketing.
Training costs include integrity certifications and conference registration for employees.
Legal guidance for sports betting licenses
SWARC broke into a closed session to discuss allowing members to obtain “legal counsel regarding legal standards for race- and gender-conscious government programs.”
“[These are] very complex issues that this commission needs to bear in mind in issuing licenses,” SWARC Chair Thomas Brandt said.
The closed session followed a presentation by Zenita Wickham Hurley, chief counsel for civil rights at the Maryland Office of the Attorney General, and Cheryl Brown-Whitfield, principal counsel for the Maryland Department of Transportation.
Next steps for MD sports betting
Following the closed session, consulting firm Taft Stettinius & Hollister Chair Cezar Froelich offered some thoughts moving forward.
“Class B licenses aren’t set up for running a sportsbook by themselves,” Froelich said. “We have to take a look at the interplay between the mobile and Class B licenses. If you just go out and issue the Class B by themselves without taking into account that it has to be beneficial for a mobile sports operator, you could find yourself in a circumstance Class B don’t get picked up.”
Brandt agreed and said there will need to be some brainstorming before awarding additional licenses. He set the next SWARC meeting for Oct. 14.
“Achieving the goals of the legislation will indeed require some creative for us to fulfill what we’re trying to accomplish here,” Brandt said before setting the date. “I don’t dare think we try to push any faster, we’re not dragging our feet by any stretch.”
