Maryland Online Sports Betting Takes Shape with Non-Profit Licensing Bill

Maryland Online Sports Betting Takes Shape with Non-Profit Licensing Bill article feature image

Michael Robinson Chavez/The Washington Post via Getty Images. Pictured: Maryland State House.

A Maryland legislative committee hearing on Tuesday shed light on a proposed sports betting license for a nonprofit organization, the next step for lawmakers as they determine which entities will be eligible for sportsbooks.

Sen. Chris West’s proposal would allow the Maryland State Fairgrounds to open a retail and online sportsbook. If approved, Maryland State Fair officials would use all sports betting revenues for charitable purposes, West said during a hearing on the bill Tuesday. Located in Baltimore County, the fairgrounds are about 15 miles north of downtown Baltimore city and 20 miles south of the Pennsylvania border.

West told the Senate’s Budget and Taxation Committee the Fairgrounds already operated the most lucrative off-track betting location in the state and that same facility would be used to house a retail sportsbook. It would be the only retail betting location in Baltimore County under his proposal.

“If there's a determination to portion the sports gambling licenses throughout the state, it will be important to ensure that Baltimore County is not left out,” West said.

The bill would make Maryland the first among roughly two-dozen states with legal sports betting that required a license for a nonprofit. Its passage is contingent on separate legislation to regulate sports betting in the state.

West’s bill is the first Senate proposal introduced this legislative session that addresses the crucial framework for allocating sports betting licenses. A more comprehensive bill is set to be introduced shortly, but West’s early effort helps outline another potential stakeholder in what will be crucial negotiations surrounding eligible licensees.

Eligible Maryland Sportsbook Operators Still Undetermined

Maryland voters overwhelmingly approved legal sports betting in a 2020 ballot referendum, but key issues such as tax rates and license holders must be approved by lawmakers before wagering can begin.

The COVID-19 pandemic curtailed the 2020 legislative efforts, including a more fleshed-out bill that would have answered many of these key issues backers in the General Assembly had hoped to approve in conjunction with the referendum. Elected officials working on the 2020 bill largely backed online and retail licenses for the state’s six commercial casinos and it seems nearly certain the 2021 follow-up bill will do the same.

Most casino license holders would seem to already have their affiliate sportsbook operator set. MGM, Penn National and Churchill Downs already own Maryland casinos while parent companies for Live! Casino and Hotel, Rock Gap Casino Resort and Horseshoe Casino Baltimore already have existing sportsbook deals with their properties in other states.

Once approved, Maryland would likely have the following sportsbooks. Notably, Caesars owns the Horseshoe Casino as well as the William Hill brand, so this could force Rocky Gap parent company Golden Entertainment to find a separate partner.

  • MGM National Harbor: BetMGM
  • Horseshoe Casino Baltimore: Caesars
  • Hollywood Casino Perryville: Barstool Sportsbook
  • Live! Casino & Hotel: FanDuel
  • Ocean Downs: TwinSpires
  • Rocky Gap Casino Resort: William Hill

In addition to the six casinos, some lawmakers had backed at least one online license for the Stronach Group, which owns the iconic Laurel Park and Pimlico race tracks. The Stronach Group has pushed to open sportsbooks at its facilities in California and Florida, but neither state has legalized sports betting.

The law that instituted the 2020 ballot measure also mandated the state evaluate minority stakeholder participation in the nascent sports betting market. Though it didn’t specify how to do so, it could also open the door for sportsbook ownership outside the state’s traditional gambling entities. Hypothetically, that could mean sportsbook licensees for certain bars or restaurants.

Maryland Sports Betting Future

How to license these competing factions will determine the launch — and likely the success — of Maryland sports betting.

Maryland is among the national leaders in per capita income and education levels, demographic trends that positively correlate with sports betting participation. Nearly every major operator will seek to enter the market, but the allocation for online licenses, which will make up the lion’s share of operator revenues, could leave some top sportsbooks out of the Old Line State.

If lawmakers allow one online license apiece for the six casinos, horse track operator and the fairgrounds, that would mean only eight legal sportsbooks. That would trail the sportsbook offerings in both neighboring Virginia and Pennsylvania, which compete with Maryland for gambling dollars.

Bar and restaurant licensure could expand gaming options, but the larger gaming interests would surely fight any proposal that allowed them statewide mobile licensing. With only retail options, they would make up a small fraction of the overall market handle.

West’s Fairgrounds bill would also seem to preclude any other hypothetical retail sportsbook in Baltimore County, home to more than 800,000 residents, the third-most of any Maryland county.

Senate Finance and Taxation Committee Chair Guy Guzzone said a vote on the fairgrounds bill could come as early as Thursday. In the meantime, that legislation – and Maryland’s sports betting future – depends on the far more consequential proposal that determines how officials would approve, tax and regulate its sports betting industry.

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