Maryland lawmakers earlier this week rushed through a bare-bones sports betting referendum bill that didn’t include any framework for how legal sports wagering would work in the state — a matter that both chambers had debated before the COVID-19 pandemic gripped the country. Was that the right move? Stakeholders are split on it..
Both the House and the Senate overwhelmingly — the Senate vote was unanimous — approved SB 4, which was stripped clean of everything from the tax rate to problem gaming funds to where sports betting could take place. It seems the General Assembly was in a sprint to make sure the referendum would get on the November 2020 ballot.
Due to the coronavirus crisis, the General Assembly adjourned three weeks early on Wednesday, and in Maryland, referendums can only be held in even-numbered years. So, if sports betting wasn’t placed on the ballot in 2020, according to the state constitution regarding gambling expansions, it would have to wait until 2022.
Will MD voters have enough information?
Some industry onlookers say a referendum with no infrastructure backing it is a huge risk.
“In the legislative sausage-making process, someone needs to get a shipment out, but apparently forgot all the ingredients,” said consultant Brendan Bussmann with Global Market Advisors. “Voters may not approve sports betting without some of the details needed. This could be best summarized as a poll question.”
Ep. 83 of the Gamble On podcast is live! @EricRaskin and @BergenBrennan talk COVID-19’s impact on sports betting and land-based casinos, Maryland's betting bill and horse racing industry news. Plus, special guest @ChrisGimino!
— US Bets (@US_Bets) March 19, 2020
Should Governor Larry Hogan sign the bill, Maryland would become the third state to send the decision to legalize sports betting to the voters. Maryland will likely be one of two states with sports betting on the ballot in November, as California’s tribes have already reached the 25% mark in the number of signatures required to place an initiative on the ballot. Sources say the tribes have collected all the signatures needed for their tribal-only, no-mobile initiative, though the California Secretary of State’s website shows they’ve only cleared the 25% threshold.
The difference between California, and Colorado and Arkansas, which legalized via referendum in 2019 and 2018, respectively, is that in Maryland, a bill that originally included clear infrastructure is now just a bill with a referendum question asking if voters want sports betting. According to multiple stakeholders, the text of the question is solid, which a key part of legalization.
Do you favor the expansion of commercial gaming in the State of Maryland to authorize sports and event betting for the primary purpose of raising revenue for education?
Maryland doesn’t want to be left behind
Maryland already has a mature gaming market unlike neighbor Virginia, which has also sent a sports betting bill to its governor. What that means is that the path from legalization to launch will be a little smoother because some infrastructure is already in place.
Sara Slane, former American Gaming Association senior vice president of public affairs and now a sports betting consultant, thinks Maryland lawmakers did the right thing by moving fast in this “unprecedented” climate.
“If the legislature hadn’t done this, it wouldn’t get on the ballot until 2022,” she said. “I think they will be called back for special session, and I think it’s the tip of the spear, and this will get hashed out. You have to have the language ready to get on the ballot by August, and I think things will get hashed out and there will be more clarity. I think it was important to get on the ballot, and for Maryland to not be left behind by other states. I think it was the right move.”
Maryland is surrounded by states with live legal sports betting — Delaware, Pennsylvania and West Virginia were all among the first states to offer sports betting. The District of Columbia legalized more than a year ago and the Lottery has plans to roll out its sports betting app within a few weeks. And Virginia will join the club if Governor Ralph Northam signs HB 896.
To the sound of the saddest of sad trombones:
D.C.'s Sports Betting App Will Launch Into a World With No Sports https://t.co/BWdX1p74o4
— Jeffrey Anderson (@JeffAndersonDC1) March 18, 2020
Referendum with no teeth a ‘risk’
A key question surrounding whether or not it was wise to push through a referendum with no teeth is whether or not voters will care. Some stakeholders argue that voters aren’t comfortable voting for something they know little about.
“I think there is a tremendous risk associated with this,” said Brianne Doura-Schawohl, the legislative director for the National Council on Problem Gambling, who follows gaming legislation across the country. “I don’t think they thought this through from a public relations standpoint. Voters should be entitled to know what they are voting for and the execution of it. To strip the bill in its entirety, I think it says a lot more about what they are going to have to do to craft the bill later.”
Slane, who has experience running referendums in Maryland, disagrees.
“Typically voters on referendum questions will vote on what they are educated about,” Slane said. “Operators are going to actively support seeing the referendum pass and the education and messaging to voters will be about the benefit of legalizing sports betting. No one is going to argue that it’s about bringing in more money and creating new jobs. Right now, money is going to other states.”
The text of the current bill does direct lawmakers to revisit the issue and develop infrastructure. The House and Senate were close on terms, and before it was stripped, SB 4 called for a 20% tax rate on gross gaming revenue and application fees of up to $2.5 million. It would have allowed sports betting at casinos, racetracks and professional sports venues, which would have included the home of the Washington Redskins, whose lease at FedEx Field in Landover expires in 2027.
“Let’s say the ballot is favorable among Marylanders, but if they couldn’t push the Senate bill through in its current iteration, what does that mean for the future?” Doura-Schawohl said. “I think that Maryland pushing this through with no framework is a huge gamble. I wasn’t thrilled with the Senate version, but it had some pretty clear infrastructure.”