Even Maryland’s Sports Wagering Application Review Commission is growing tired of the wait for a legalized mobile sports betting launch. SWARC Chairman Thomas Brandt sent the Joint Committee on Administrative, Executive, and Legislative Review a letter Friday urging the group of lawmakers to work swiftly to approve the SWARC’s emergency regulations.
Approval from the AELR is critical for the SWARC to move forward with the process of awarding mobile sports betting licenses. The SWARC sent emergency regulations to the legislative committee over a month ago.
“SWARC approved its proposed regulations last month and submitted them for consideration by AELR on July 22, 2022,” Brandt said in his letter. “Without AELR’s approval, SWARC is not able to fully and properly build Maryland’s sports wagering program, including mobile wagering, which is central to the program’s success. We have been advised that SWARC must wait for AELR’s approval of our emergency regulations before we can begin accepting applications.”
Disparity analysis key reason for delay
The SWARC is completing an industry analysis designed to see what race- and gender-conscious measures the organization can legally impose on the state’s sports betting industry. According to Brandt, the AELR may be waiting for those results before approving the regulations, as the disparity analysis results could lead to changes.
Brandt was told the disparity study was completed on Aug. 19, although the SWARC has yet to receive or share the full results.
“We understand that AELR is interested in seeing the outcome of the industry analysis, and I am pleased to provide you with a preview of its determinations based on information I have very recently received,” Brandt wrote. “On August 19, 2022, the Maryland Department of Transportation informed SWARC that the sports wagering industry analysis has been completed.
“The Consulting Economist and author of the analysis, Dr. Jon Wainwright, concluded that he could not ‘opine on whether the 2017 Disparity Study is sufficient to support any other type of race- and/or gender-conscious remedy in the SWEW Industry in Maryland. This means that based on the analysis, SWARC is not able to apply any race- and/or gender-conscious criteria in its evaluation of applicants.”
SWARC Chair Thomas Brandt adds that the AG's office has completed the "Disparity Study" that's held up online sports betting for 2 years…
…but based on a preview shared with SWARC, it doesn't look like it was ever worth doing.
— Sam McQuillan (@sam_mcquill) August 26, 2022
Brandt went on to say that while the SWARC can’t apply race- or gender-conscious measures when evaluating applicants, the organization did create ways to ensure meaningful diversity at the ownership level of sports betting companies operating in the state.
“Ultimately, SWARC decided to use a Personal Net Worth (PNW) provision (proposed COMAR 36.11.02.19). Under this provision, every applicant for a competitive mobile or Class B facility sports wagering license will be required to demonstrate that at least 5% of its direct or indirect ownership is by individuals with a PNW no more than $1.847 million,” Brandt wrote. “This PNW provision meets the definition of ‘disadvantaged business enterprises’ that is used elsewhere in Maryland MBE programs. SWARC has posted frequently asked questions concerning this ownership requirement on the Applications page at swarc.org to ensure this requirement is understood by prospective applicants.”
“SWARC believes this requirement will present a meaningful wealth-building opportunity, particularly for mobile licensees,” Brandt worte. “It is noteworthy that the nature of the mobile sports wagering business does not entail significant numbers of employees, subcontractors, or physical facilities, as with other industries, so the ownership opportunity is SWARC’s best way to achieve the legislation’s objectives. Further delay and study would not realistically lead to a different conclusion.”
With the analysis completed, Brandt wants the AELR to act quickly to approve the regulations. The general public and Gov. Larry Hogan haven’t been thrilled with the slow progress toward an eventual launch of legal mobile sports betting platforms.
Regulations were recently published in the Maryland Register, and there’s a 30-day public comment period on the regulations that lasts until Sept 26. The SWARC is hosting a public comment meeting on Sept. 9 at Maryland Lottery headquarters in Baltimore.
Brandt and others are hopeful that applications can be released soon after that, allowing organizations to apply for mobile sports betting licenses. If the AELR hasn’t approved the regulations, however, the timeline could be delayed, meaning mobile sportsbooks might not be available in Maryland until after the Super Bowl.
“After much work, we are nearly at the finish line, but we need your help,” Brandt wrote to the legislative committee. “The sports wagering industry is ‘seasonal,’ and the football season (September through the Super Bowl in February) annually generates much more activity than other times of the year. Thus, unless we move quickly, Marylanders will miss access to mobile wagering on the 2022 football season, and the state will miss out on the related revenue.”