UPDATE: At 7:02 p.m. ET on Monday night, Maryland’s House of Delegates approved a sports betting framework bill, 122-16-1. The approval came within hours of the Senate doing the same, and the bill now heads to Gov. Larry Hogan for signature. Lawmakers have repeatedly said they would like to see sports betting live by the fall, and to that end, both chambers approved the “emergency” amendment on the bill.
During House discussion, exactly how many licenses will be issued was clarified: The reworked bill, which is not yet available for public review, names 10 Class A licensees, including three professional sports venues and three major casinos, and seven Class B licensees, including OTBs, two bingo halls with more than 200 VLTs, and other venues. It appears as if all 17 named businesses can apply for retail licenses. The amended bill calls for 60 mobile licenses, and each of the 17 named locations will have a chance to apply for a mobile license, as will stand-alone mobile platforms or any other licensees. The bill also allows for 30 additional Class B retail licenses for places like restaurants, bars, or amusement centers.
After stripping and replacing all 23 amendments to HB 940, the Maryland Senate on Monday afternoon unanimously approved a sports betting regulatory framework on the final session day. The bill was immediately sent to the House of Delegates to act by a midnight deadline, when the 2021 session ends.
The text of the new amendments was not immediately available, but in addition to naming existing casinos, three professional sports venues, and several other venues as Class A licensees, bill champion Craig Zucker told his peers during debate that the bill allows for an additional 60 mobile/online licenses in the state. That number is the highest cap anywhere in the nation, though several states have no cap on the number of available sports betting licenses.
For a state with only about 6 million people, the number seems unusually high, but Maryland lawmakers have been scrambling for language that they feel will make sports wagering licenses accessible to nearly any business that might want it and to avoid “over saturation.”
For comparison, neighboring Pennsylvania, with a population of nearly 13 million, capped its licenses at its number of casinos (currently 18 built or in development); New Jersey with nearly 9 million people, the largest market in the U.S. based on betting handle, currently has 20 legal sportsbooks online while law allows up to 42; Virginia, with a population of about 8.5 million, capped its licenses at about 15; and Colorado, with nearly 6 million people, issued a license to each of the 30-plus existing casinos in the state.
Minority business fund part of bill
According to Zucker, the new amendments also made the 15% tax rate on gross sports betting revenue the same across the board — it was previously 15% for mobile platforms and 13% for retail — and changed the renewal fee from a set rate to “1% of proceeds for a three-year average.”
HB 940 was introduced in early February, three months after voters in Maryland legalized sports betting via referendum. Since then, lawmakers have made minority participation a centerpiece of legislation, and to that end they included a tiered licensing system and fee structure in the bill. The proposal also includes a fund that minority and women-owned businesses can tap into to pay for licensing fees, operational costs, and training. The latest version of the bill names some Class B licensees — those that can apply for less expensive retail permits — including two bingo halls, and then allows for 30 additional Class B licenses.
The newest language is the result of a weekend’s worth of discussion between the House and Senate to come to an agreement. Sources say the bill should pass the House with little opposition.
The Senate took up HB 940 shortly after noon, and Zucker asked his peers to move the bill back to second reading, at which point he stripped all the committee amendments and replaced them with a similar set of amendments. It was at this point that Zucker explained which entities were named for sports betting licenses — including existing casinos, professional sports venues, some racetracks, certain bingo halls, the Maryland State Fairgrounds, and more — and that in addition to those venues, there would also be 60 additional mobile-only licenses available and 30 additional Class B licenses, which have a much lower licensing fee and would allow for in-person wagering.
The law permits sportsbook patrons to register for an account in person or online using an approved website or mobile application.
Senators not clear on who can get licensed
The new amendments brought questions from multiple senators asking for clarification during the second reading:
Sen. Chris West wanted to make sure the Maryland State Fairgrounds, which is in his district, would be able to get licensed. It is.
Sen. Arthur Ellis wanted to be clear that riverboats are included in the bill — they are — and to know whether or not the minor-league Blue Crabs could apply for a license. While not named, the team can apply.
Sen. Stephen Hershey wondered why the bill would now restrict the number of licenses. “We wanted to make sure we gave those businesses that want to apply a chance to succeed and thrive, but we also want to prevent over-saturation,” Zucker answered. Hershey said he would have preferred no cap.
And Zucker then went on to explain that the bill now also has an “emergency” amendment so the Maryland Lottery would quickly be able to draft “emergency regulations.”
The amendments and amended bill then passed second reading, at which point “Rule 24” was suspended to allow for the bill to be immediately heard on third reading. But it didn’t quite play out that way. After Sen. Justin Ready confirmed that certain racetracks were included in the bill, Sen. Pamela Beidle then began a line of questioning about which bingo halls were included in the bill, as only one of three in Anne Arundel County is named. Zucker explained that the other bingo halls could apply despite not being named. It was at this point that the Senate tabled discussion for an hour to allow members to study the bill before coming back for the final vote.