Next Steps After Maryland Sports Betting Signed Into Law

Next Steps After Maryland Sports Betting Signed Into Law
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Maryland Gov. Larry Hogan on Tuesday signed into law the state’s sports wagering bill that allows for both retail and online betting and has the specific intent of being as inclusive as possible regarding who can participate in the sports gambling industry.

A next step in Maryland will be to set up a Sports Wagering Application Review Commission, which will be tasked with reviewing and awarding licenses. The review process appears to be more streamlined for the retail licenses, but the review of online licenses will give preference to online operators with significant minority and/or women participation to be early movers. Applicants would still be subject to a vetting process by state regulators.

RELATED: Q&A with Maryland Lottery’s Gordon Medenica on sports betting

Hogan, alongside Maryland Senate President Bill Ferguson and Speaker of the House Adrienne A. Jones, signed 223 bills into law Tuesday. Jones noted Tuesday at the start of the ceremony that the sports betting law gives minorities and women a great opportunity to participate in the industry.

Under the sports betting law, Marylanders will be able to place sports wagers in-person at casinos, race tracks and many other retail locations, including pro sports facilities and possibly bars and restaurants, and also be able to bet on sports from their homes or elsewhere on computers and mobile devices.

Maryland voters approved sports betting in a November referendum by a 2-to-1 margin. The state’s constitution requires voter approval for a major expansion in gambling. Maryland already has casino gambling, horse racing (including OTBs), bingo and the lottery.

When the Maryland General assembly held hearings in early 2020 before the COVID-19 pandemic, discussion centered on sports betting primarily attached to casinos and potentially, race tracks and OTBs. However, there were concerns about insufficient provisions for minority equity participation and, as a result, a barebones up-or-down referendum on sports wagering was presented to voters.

Retail Betting First, Then Online

After the voter approval, in the 2021 General Assembly session, the work of crafting a sports wagering bill — which would meet goals of providing opportunity for smaller operators, including minority- and women-owned businesses — began and the result was a first-in-the-country law that provides for several dozen retail licenses and as many as 60 online operators (although no one expects nearly that number of online applicants).

For practical purposes, according to the head of the Maryland Lottery and Gaming Control Agency Gordon Medenica, investigation, vetting and licensing procedures are likely to result in the first betting opportunities occurring at retail sportsbooks in the state’s casinos perhaps as soon as the 2021 football season.

However, issues of producing regulations, and licensing operators and vendors may mean that online sports wagering might not be up-and-running until 2022.

Details of the Sports Wagering Law

Regarding the number of sports wagering licenses and who can apply:

  • There are two categories of sports wagering facility licenses for retail sportsbooks. One tier that is referred to as “Class A” includes the state’s six casinos, racetracks and three pro sports venues where the Orioles, Ravens and Washington Football Team play. The larger of those businesses will pay a $2 million application fee and the smaller ones will pay a $1 million application fee.
  • Another category of retail sports wagering licenses known as "Class B" includes seven designated business including the Timonium Fairgrounds, two bingo parlors and OTBs. Another 30 licenses will be available to other businesses such as bars and restaurants. Those 30 licensees can be either B-1 or B-2, depending on their size. Larger businesses will pay a $250,000 application fee and smaller ones will pay a $50,000 application fee.
  • There is just one category for online sports wagering licensing and there will be 60 online licenses available. Application fee is $500,000.

Other highlights of the law are:

  • A proposal that designates a pot of money will be funded from license applications fees from the larger retail licensees (and other sources) that will go toward assisting smaller retail applicants.
  • Tax rate of 15% for all operators.
  • A provision for $1.5 million each for Morgan State University and Bowie State University to establish a Center for the Study of Data Analytics and Sports Gaming at each university.
  • Included are specific provisions for self-exclusion from sports wagering for bettors who want to restrict their gambling behavior, for a prohibition on advertising aimed at minors and for measures that help protect wagering consumers.