Three Casinos Get Preliminary Okay to Take Bets on Sports, but Questions Abound

The Maryland Lottery and Gaming Control Commission on Wednesday determined that three existing casinos are qualified to win a sports betting license.

Voting unanimously, the commission found that the three venues — Horseshoe Casino in Baltimore, Live! Casino & Hotel in Hanover, and MGM National Harbor in Oxon Hill — meet the standards set forth in Maryland’s new sports wagering law.

The applications will next be considered by the Sports Wagering Application Review Commission (SWARC), which is responsible for awarding licenses.

The three casinos were among 17 entities identified in state law to operate an on-site sportsbook, pending a review of their qualifications. (Applications from businesses not named in the bill and those seeking a mobile license are not being accepted yet, but the window is expected to open soon.)

The law approved by the General Assembly in April includes an “alternative licensing standard.” That provision allows companies that already hold a Maryland gaming license — or that have one in a state where the licensing standards are deemed to be “comparable” — to begin operation here while their application undergoes a full review.

All three casinos given tentative approval on Wednesday applied under that provision, and all were deemed to be operating without red flags.

Gov. Lawrence J. Hogan Jr. (R) has pressed the state’s gaming officials to move the process along as quickly as possible. Maryland’s neighbors have had sports wagering operations up and running for some time.

Wednesday’s votes — conducted during a crisp 35-minute meeting with little discussion — move the three casinos one step closer to being able to offer sports wagering on-site. Some have suggested that being the first companies to be able to accept legal bets will provide a long-term advantage in the fledgling Maryland market; others see little such benefit.

“We’re pleased to have these three applicants approved and move them along to the SWARC,” said Maryland Lottery and Gaming Director John Martin in a statement. “Our team is diligently implementing the sports wagering law, and we’re one step closer to the first in-person wagers, which we hope will take place by late fall.”

‘Disparity’ study needs to be re-done

Despite repeated assurances from Hogan, Martin and others that Marylanders will be able to place legal bets by the time the NFL playoffs roll around, there are uncertainties about the timeline.

At its most recent meeting, in late September, members of the SWARC received a closed-door briefing from the Attorney General’s office. After returning to open session, members voted to re-do a “disparity study” that had been conducted by staff.

Disparity studies are used to determine that certain businesses — typically those owned by people of color, women and others — have historically been discriminated against in the awarding of government contracts and licenses.

Such studies form the legal basis for state action to boost applications from “minority business enterprises.”

E. Randolph Marriner, chair of the Maryland Lottery and Gaming Control Commission and a member of the SWARC, made the motion to have staff conduct “another disparity review to make sure that what we’re doing complies with the law.”

No one offered an explanation as to why the study needed to be done over, though a source with knowledge told Maryland Matters the first one was “screwed up.”

In response to emailed questions, Matthew Bennett, a legislative analyst working with the SWARC, was unable to say — based on the advice of the Attorney General’s office — why the disparity study needed to be re-done. Nor could he say how it will impact the timeline for getting Maryland’s first sportsbooks up and running.

“Consistent with legal standards, the Sports Wagering Application Review Commission voted to move forward with an additional analysis,” he wrote in an email. “The details you have asked about are either not known at this time or are confidential.”

The SWARC is scheduled to meet on Oct. 14 but their agenda has not been posted, and it could not be learned on Wednesday whether the commission will act upon the three applications forwarded by the gaming and lottery commission.

Applicants that are eager to tap the Maryland market are nervous that the second disparity study will delay the first batch of approvals. (One attorney following the process questioned how the state will be able to document a history of discrimination against minority- and female-owned businesses in a brand new industry.)

In addition to the disparity issue, the commission is in the process of evaluating 350 pages of comments, submitted by more than 50 companies and individuals, regarding Maryland’s proposed regulations.

Many of the comments were submitted by heavy hitters in the industry — and they raised a host of issues, including whether Maryland should have a limit on the promotions used to lure new customers, a cap on the dollar amount of individual wagers, and whether “official league data” should be used to determine the outcome of sporting events.

Gaming officials need not resolve all of the issues raised by the public before the first sportsbooks are allowed to operate, as the commission is operating under emergency regulations that will remain in effect until the end of January.

Lastly, even after the SWARC awards a license, applicants will need to prove they have battle-tested the hardware, IT and security systems they will use when they begin accepting bets.

“They approve that you’re qualified, then you have to get awarded, then you have to run through all the hoops and hurdles, including demonstrating that your system works,” said a source, speaking on condition of anonymity. “There are steps to go, after SWARC [acts], before someone can actually take a bet.”

“It’s really hard for anybody to tell you exactly what day they’re going to open,” the source concluded.

MGM, Live! and Horseshoe are all in the process of building out in-person betting areas within their existing casinos in anticipation of final approval. Other casinos, horse tracks and off-track betting sites are expected to have their applications approved under the “alternative licensing standard” in the not-too-distant future.

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