Senate Gets Into the Sports Betting Game, Seeks to Rewrite House Bill

Maryland lawmakers are considering a bill to establish a sports gaming industry in Maryland, after voters overwhelmingly approved a referendum to legalize sports gambling in November. Maryland is playing catch-up to neighboring states — like Virginia, Delaware and New Jersey, along with Washington, D.C. — that already allow legalized sports betting. Photo by Danielle E. Gaines.

After weeks of laying low in the sports gaming debate, Maryland senators sprung to action Tuesday, taking steps to put their imprint on House legislation to bring sports betting to the state in just a matter of months.

Most significantly, the proposal members of the Senate Budget and Taxation Committee are considering would theoretically allow an almost unlimited number of sports betting operators in the state.

“We seem to be getting an enormous amount of requests [for licenses] from all kinds of directions, so we decided that the fairest thing we could do is take a free market approach to this,” said Sen. Guy J. Guzzone (D-Howard), the committee chairman.

While delegates worked throughout the legislative session to craft a sports gaming bill, which was introduced by Speaker Adrienne A. Jones (D-Baltimore County), senators met periodically in a work group to discuss various issues, but did not put together a bill of their own. But that absence of legislative activity changed in earnest on Tuesday, when the work group met to hammer out proposed amendments to the House bill, then the budget panel followed up with a preliminary discussion.

Guzzone said the committee would meet shortly after Wednesday’s Senate floor session and likely would vote on Jones’ bill, with senators’ amendments, at that time.

What’s unclear is how House leaders will react to having their legislation carved up so late in the General Assembly session, which ends Monday — and if there’s time to reconcile differences between the two chambers.

Maryland voters authorized sports gaming in November 2020 as surrounding states and the District of Columbia put sports betting programs into place and began to enjoy the revenues. But the question of where and how to bring sports gaming to Maryland vexed lawmakers and sparked a heavy round of lobbying as the legislature began to ponder the question.

The House bill, which passed 129-10 more than three weeks ago, sought to limit the number of sports gaming licenses in the state, putting lawmakers in the potentially uncomfortable position of having to decide where to place gaming operations.

Jones’ legislation would guarantee betting licenses for Maryland’s six casinos and to teams that play in the state’s three professional sports stadiums. The state’s busiest horse track, Laurel Park, would also be guaranteed a license, as would the State Fairgrounds in Timonium and the Riverboat on the Potomac, an off-track betting venue in Charles County.

In addition, 10 additional “bricks and mortar” licenses would be awarded to other entities, such as restaurants, sports bars and racing venues, through a competitive process. There also would be 15 “mobile” licenses, also competitively bid, for companies that want to take bets online.

But senators are proposing to make an almost unlimited number of licenses theoretically available.

Among other things, the license applications would be considered by a new state entity known as the Sports Wagering Application Review Commission, on a rolling basis, rather than after all the applications have been submitted. This, along with designating the bill emergency legislation, could enable sports betting to begin in Maryland relatively quickly – “potentially, [for] the football season,” Guzzone told his colleagues Tuesday.

Senators envision five tiers of licenses for sports betting – each with its own application fees (some of which are quite hefty), along with a taxing structure to generate revenue for state education.

The class A-1 license would apply to large casinos, the Laurel Park racing track, and the state’s three major league sports stadiums. It would cost $2 million to apply for a license, and $500,000 for a five-year renewal fee.

The A-2 license would apply primarily to smaller casinos. The license fee would be $1 million with a $300,000 five-year renewal fee.

There would be two categories of class-B licenses, as well as a license for mobile gaming apps. The latter category would cost $500,000 for an initial license and $100,000 for a five-year renewal — and that’s where the lack of limits that senators are debating could come into play.

“Folks did not want to be left out, particularly with the mobile licenses,” said Sen. Cory V. McCray (D-Baltimore City), a member of the sports gaming workgroup and the budget committee.

As policymakers have debated bringing sports gaming to Maryland, one of the major sticking points has been providing adequate opportunities for minority players in the industry. Legislators drew huge amounts of criticism as the state was standing up its medical marijuana industry, for not doing enough to promote minority businesses.

One of the proposed Senate amendments to the House bill would create a fund to encourage people of color and women to enter the industry, paid for by a 5% surcharge on the biggest sports gaming licensees. The money would be used for training for small business owners in the industry and to help defray their operating costs, among other things.

Additionally, the senators envision making money available to at least two of Maryland’s historically Black colleges and universities to provide training and information for students interested in the sports gaming business.

While both House and Senate leaders want to maximize minority participation in sports gaming, some critics have suggested that Jones’ bill, with its limited number of licenses, would give an unfair advantage to bigger, more established players in the industry. But Sen. James C. Rosapepe (D-Prince George’s) wondered whether offering an unlimited number of licenses, to be awarded on a rolling basis, could also put fledgling, minority-owned companies at a disadvantage.

“I think that may create a problem with equity,” he said. “The most savvy will get in the door first — kind of like with vaccines.”

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Josh Kurtz
Founding Editor Josh Kurtz is a veteran chronicler of Maryland politics and government. He began covering the State House in 1995 for The Gazette newspapers, and has been writing about state and local politics ever since. He was an editor at Roll Call, the Capitol Hill newspaper, for eight years, and for eight years was the editor of E&E Daily, which covers energy and environmental policy on Capitol Hill. For 6 1/2 years Kurtz wrote a weekly column on state politics for Center Maryland and has written for several other Maryland publications as well. Kurtz regularly gives speeches and appears on TV and radio shows to discuss Maryland politics.