In three years, almost 30 states have approved sports gambling legislation and, although the framework varies from state to state, the concept remains the same. States are ready to capitalize on the revenue stream that has been flowing underground for years, while ensuring they can introduce consumer protection and security. Maryland has joined this group as of yesterday, following the signing of sports gambling and daily fantasy sports legislation by Governor Larry Hogan. It’s now time to prepare the market to open, with the first legal bets possible beginning on June 1.
Legal Sportsbooks Coming to Maryland
Even though over half of the US states have legalized sports gambling, some lawmakers, like those in Alabama, are still unable to see the bigger picture. This isn’t the case with Maryland, though, which was able to legalize the activity relatively quickly. Last November, voters signed off on measure that allowed lawmakers to get the ball rolling. Now, less than five months later and amid a global COVID-19 pandemic, their efforts have paid off.
The enactment of Maryland’s sports gambling legislation comes through House Bill 940. It provides the framework for a robust market that includes in-person and online wagers through a variety of venues and the goal is to have an open market in which even small and minority-owned businesses can participate. If the state’s casino revenue can be used as a means to determine how strong the market will be, Maryland’s sports gambling revenue is going to be substantial. Some estimates put the tax revenue for the state at around $35 million a year.
Over 100 Sports Gambling Licenses Planned
Maryland lawmakers have laid out a diverse and flexible plan that they believe will convert the state into one of the leaders in the sports gambling industry. Ten licenses will be issued to entities like MGM Grand and the Laurel Horse Racing Track, as well as to the Baltimore Orioles and the Baltimore Ravens. Another 30 licenses will be made available to restaurants, bars and similar businesses, and another 60 will be made available for online sports gambling. Independent, minority business enterprises (MBE) or companies partnered with MBEs will be prioritized for the licenses.
The license fees are relatively tame compared to what some states have charged, but the bulk return on 100 licenses will be greater. Application fees for large gambling properties and sports stadiums will cost $250,000, while the smaller venues will pay $50,000. Online sportsbooks will be hit the most, being charged $500,000. There will also be an annual fee to maintain the license – $50,000 for the large properties, $10,000 for the smaller ones and $100,000 for the online operators.
Senate President Bill Ferguson is anxious to see what kind of response there is to the state’s new market, especially from the MBE segment. He asserts, “I think at the end of the day, if you look at other states, there had been a lot of interest about applications, but when they actually became open for businesses to apply, they never really fully hit their caps. So, I think we’re in a good enough spot to make sure that there won’t be a crowding-out effect that will disincentivize minority businesses from being able to participate.”