Maryland House Bill Outlines Sports Betting Regulations

Maryland House Bill Outlines Sports Betting Regulations
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Maryland took a step toward hammering out the rules that will define what sports wagering will look like in that state with the introduction of a sports betting bill in the House of Delegates.

In November, voters approved Maryland online sports betting by a 2-to-1 margin but the referendum left details to the state’s General Assembly to work out.

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It has been expected that a work committee would be assembled to help frame MD sports wagering rules but a comprehensive bill was introduced Tuesday under the House speaker’s title that has certainly created a concrete starting point with specific parameters. The speaker of the House of Delegates is Del. Adrienne Jones of Baltimore County. Baltimore County is a jurisdiction mostly surrounding but distinct from Baltimore City.

Maryland House Bill 940 addresses sports wagering, both retail and online, with a surprise inclusion of new taxes on daily fantasy sports.

The bill provides for a Sports Wagering Application Review Commission which can issue what the bill refers to as Class A Sports Wagering Facility Licenses and Class B Sports Wagering Facility Licenses. The Class A licenses can go to video lottery operators (read casinos, the state has six) and horse racing licensees. In addition, the bill provides for five Class B Licenses that would go to applicants who meet the state’s requirements for licensing but are not eligible or already have a Class A license.

In addition, the Application Review Commission is authorized to issue up to 10 mobile sports wagering licenses.

Proposed HB 940 Fee Schedule

The initial fee schedule for sports wagering licenses specifies: $250,000 for a Class A facility license; $50,000 for a Class B facility license, and $500,000 for a mobile sports wagering license. There’s also a schedule for license renewals ranging from $10,000 to $100,000. Sports wagering licenses would be good for five years.

The tax rate on online operators would be 15% applied to the first $5 million of an operator’s revenue, and 17.5% of revenue over $5 million. Taxes collected will go toward education. The tax rate for retail sports wagering would be 15%. As has been the case in almost all jurisdictions with both retail and online sports wagering, the majority of the betting is expected to be done online.

The bill also indicates that sports wagering could be allowed at Camden Yards, the Baltimore Orioles’ baseball park, and at M&T Bank Stadium, the Baltimore Ravens’ football stadium, on game days using self-service kiosks or perhaps even in a retail setting. In addition, sports wagering would be allowed at Pimlico Race Course (home of the Preakness), on live race days, and at the Laurel Park and Timonium Fairgrounds race tracks, with the provision that they hold horse racing licenses.

Online Registration Included

Of interest to potential online bettors is that registration for mobile betting would be permitted to be done online as well as in-person at a sports wagering facility. As everywhere in the U.S., the wagering would be intrastate meaning bettors must be located within the state when wagering. The minimum age is 21 years old.

The bill is emphatic in encouraging minority and women participation in sports wagering businesses and it details how money must be set aside to address disordered gambling problems.

CHECK OUT: Q&A with Maryland State Sen. Craig Zucler on sports betting

Regarding fantasy sports, such contests that award prizes have been legal in Maryland for years. However, HB940 addresses taxes and fees for commercial fantasy operators. The bill specifies an initial $50,000 registration and yearly renewals at the same figure. The bill also specifies a tax rate on operators of 15%. Friendly fantasy contests among friends are not subject to the bill’s provisions.

While HB940 is comprehensive, it remains to be seen whether the state Senate drafts its own bill. Should that be the case, and it’s likely that will happen, there will have to be a reconciliation of the House and Senate bills before a final bill is sent to Gov. Larry Hogan for his signature. While the Maryland legislature is Democrat-controlled and Hogan is a Republican, earlier indications were that Hogan would likely sign whatever reasonable legislation is sent to him.