Maryland Online Sports Betting Bill Passes Legislature

Maryland lawmakers passed a sweeping sports betting bill Monday that will permit as many as 60 online operators and 30 retail sportsbooks between casinos, professional sports stadiums, small businesses and scores of other entities and organizations.

The bill now goes to the desk of Gov. Larry Hogan, who is expected to sign it into law. Sports betting backers are hoping the first retail and online sportsbooks can launch ahead of the 2021 football season.

The Senate approved the amended bill 47-0 Monday. The House of Delegates approved the final version hours later, 112-16-1.

By a two-to-one margin, Maryland voters supported a 2020 ballot measure that amended the state constitution to permit legal sports wagering. With Republicans such as Hogan and party leaders in the Democratic-controlled House and Senate largely aligned behind sports betting, policymakers spent the past few months wrestling through how to not just legalize wagering, but meet a prior, largely undefined legislative requirement to ensure minority and women-owned business participation.

Many such small business owners testified for increased licenses for retail and especially online sportsbooks, the latter of which is expected to make up 80 percent or more of the state’s total wagering handle.

The original House version of the bill, sponsored by Speaker Adrienne Jones, put stricter limits on the number of online and retail sportsbook licenses. The Senate later removed the online sportsbook cap, and created four separate categories for retail books, with smaller businesses paying lower fees.

The House and Senate reached a last-minute compromise over the weekend that caps the licensees, but still permits the most potential operators of any state behind only uncapped markets in Tennessee and Wyoming. The General Assembly adjourned sine die at midnight Tuesday morning, concluding the legislature’s last chance to pass bills during its regularly scheduled 2021 session.

Bill Details

It’s too early to tell which sportsbooks would enter the market, but Marylanders should expect most if not all industry leaders to launch in the near future, especially with the plethora of licenses available; the more than 60 online available licenses are nearly double the previous leaders such as New Jersey and Colorado.

Maryland’s six full-scale commercial casinos would almost assuredly be among the first to launch their online and retail sportsbook licenses. The larger casinos would set aside some profits to a minority and women-owned business fund. Operators would pay 15 percent tax on both retail and online gross gaming revenue, slightly higher than the national median average.

Most of the casinos already have direct sportsbook partners;

• MGM National Harbor – BetMGM
• Horseshoe Casino Baltimore – Caesars/William Hill
• Hollywood Casino Perryville- Penn National’s Barstool Sportsbook
• Ocean Downs- TwinSpires
• Rocky Gap Casino Resort – TBD, but operator Golden Entertainment has deals with William Hill in other markets
• Live! Casino & Hotel- TBD, but owner Cordish Companies has deals with FanDuel in other markets

The state’s three major professional sports venues can also open retail and online sportsbooks. Maryland would be just the third jurisdiction to approve in-stadium sportsbooks for participants in a “Big 4” professional team sports leagues, after Washington D.C. and Illinois. Virginia allows in-person sportsbooks at its auto sports venues.

• Oriole Park at Camden Yards (Baltimore) – MLB’s Baltimore Orioles
• FedEx Field (Landover) – NFL’s Washington Football Team
• M&T Bank Stadium (Baltimore) – NFL’s Baltimore Ravens

The Football Team already has a deal with FanDuel in Virginia. DraftKings, which has expanded aggressively across other states and struck deals with multiple professional sports entities, would likely also enter the market, either through a Maryland stadium partnership or another avenue.

Major college venues such as the University of Maryland’s Xfinity Center and Maryland stadium would not be permitted sportsbook. However, Maryland’s bill will permit single-game wagers on in-state and out-of-state college teams.

The Stronach Group, owner of iconic Laurel Park and Pimlico Race Couse, will also be eligible for one of the licenses. So too would the Maryland State Fairgrounds in Timonium.

The larger licensees would have certain exclusivity zones for their sportsbooks.

A separate license class would charge smaller gaming entities less than the aforementioned venues such as off-track betting facilities. The bill also allocates several dozen licenses for a wide variety of non-gamming small businesses. These entities, including bars, restaurants, minor-league sports venues and many others, would be eligible for one of 30 retail licenses and/or one of the 60 online licenses.

Maryland would be the second jurisdiction, after Washington D.C., that permits independent, non-gaming entities to open retail sportsbooks without affiliating with another gaming facility or organization.

Virginia entrepreneur Shane August, who also testified in support of the Maryland sports betting bill, is spearheading a group looking to open the nation’s first retail sportsbook in Washington D.C. but efforts have stalled due to zoning issue concerns. Tennessee Action 24/7, the nation’s first independent online sportsbook, has struggled to capture Tennessee market share against better-known competitors and temporarily had its license suspended over money-laundering concerns.

Next Steps

The bill now goes to Hogan’s desk and could be signed into law as early as this week. Sports betting backers pushed “emergency” passage of the bill, which policymakers hope can expedite a launch ahead of football season 2021.

The Maryland Gaming Commission will oversee a committee that will select and licenses all retail and online sportsbook licenses with certain priority for minority and women-owned businesses. This process has taken between three to 18 months in other states, but stakeholders are confident Maryland will be on the quicker end of that spectrum.

Every neighboring jurisdiction already takes legal sports bets, most of which allow statewide mobile wagering, further incentivizing Maryland’s sportsbook launch. Hundreds of thousands of Marylanders cross into D.C. and Virginia, both of which permit online betting, every day.

Maryland’s nation-leading median household income, high-profile sports teams and wide range of available licensees should create one of the more lucrative per capita markets in the country. Many key rules and approvals must be finalized, but Monday’s resounding vote clears the way for one of the most anticipated market launches of 2021.

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