Sports betting bill makes way through Maryland Senate

Posted: March 5, 2020

Multiple amendments have been made to a Maryland Senate bill that would authorize a November referendum on sports betting in the state.

The measure, Senate Bill 4, was unanimously approved by the chamber’s Budget and Taxation Committee March 3 and discussed on Senate floor March 5. The bill and its original amendments were approved for third reading March 6; the final step in the chamber is a vote the week of March 8 and consideration by the House of Delegates.

Overall, sports betting would be permitted at bricks-and-mortar facilities and online. Each of nine licensees would be eligible for one online “skin.”

“This has been an outcome of many working groups in a bipartisan way,” said Sen. Craig Zucker, who sponsored the legislation. “This ensures that Maryland stays competitive with other states and that Maryland invests in its future.”

The neighboring states of Delaware, Pennsylvania and West Virginia already offer sports betting, and the Virginia legislature is strongly considering it. The Delaware Lottery controls sports betting in that state and there is no online component.

The state’s six casinos—Horseshoe Baltimore, MGM National Harbor, Live! Casino, Casino at Ocean Downs, Hollywood Casino Perryville and Rocky Gap Casino and Resort—would be eligible for licenses, as would three racetracks: Laurel Park and Pimlico Race Course, which would be treated as one licensee; and the Maryland State Fair at Timonium. A final license would be available for a professional football stadium in Prince George’s County, which is where the Washington Redskins play.

The language in the amendments limits racetrack licensees to Thoroughbred facilities—those licensed by the Maryland Racing Commission under Title 11, Subtitle 5. Ocean Downs, a harness track (Subtitle 6), automatically qualifies as eligible for sports betting as a “video lottery operator” via its casino license, but Rosecroft Raceway, located about three miles from MGM National Harbor, doesn’t qualify. Fair Hill, also licensed by the MRC for its meet, falls under Subtitle 7 and also isn’t eligible for a sports betting license.

The amendments also include “satellite simulcast facilities”—Maryland Jockey Club-operated off-track betting outlets not located in three of the casinos. Such currently licensed facilities are located in Boonsboro, Frederick, Hampstead and Colonial Beach, Va., on a riverboat that sits on the Potomac River in Maryland waters.

For satellite simulcast facilities, the racetrack licensee for sports betting must own or lease the equipment.

A state tax rate of 20% was listed in the original bill and remains after amendments with the exception of satellite simulcast facilities, which would pay 25%. However, the initial licensee fee of $2.5 million was changed to a tiered structure.

The Horseshoe, Live! and National Harbor (all with more than 1,000 VLTs) casinos would pay $2.5 million, and the other three $1.5 million. The Maryland Jockey Club license would also be $2.5 million, while Timonium would pay $1.5 million; satellite facilities would not have to pay a fee because of the higher tax rate. An annual license renewal fee of $250,000 for all parties was changed to a five-year renewal fee of 25% of the initial license fee.

The license fee for a skin would be no less than $5,000. An online sports wagering operator could conduct betting for more than one Maryland licensee, according to one of the amendments.

In response to questions from other lawmakers, Zucker noted that sports wagering in Maryland would be “free market,” meaning licensees could use their skins to contract with companies such as FanDuel and DraftKings.

“If a licensee wants to work with them, they would have the opportunity to do that,” Zucker said. “For anyone that wants to compete, it would be an inter-business relationship.”

Other sports betting bills in the Senate and House of Delegates have been subject to committee hearings but have not progressed. They all call for a constitutional amendment, which is currently required in Maryland for an expansion of gambling.

A fiscal note projects that sports betting, when fully operational, could account for roughly 5% of total gaming revenue in Maryland.

(Laurel Park photo by Tom LaMarra)