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Working & the Economy

Sports Wagering Inaction Could ‘Kill’ the Industry in Md., Hogan Warns

New Jersey Gov. Phil Murphy (D) places his first two bets at the Borgata Casino during the first day of sports betting in New Jersey on June 14, 2018. Maryland is still struggling to set up a sports gaming system. Photo by Edwin J. Torres/New Jersey Governor’s Office.

A commission that was expected to approve sportsbook applications from five Maryland casinos declined to take action on Wednesday, offering no explanation for its decision.

The Sports Wagering Application Review Commission (SWARC) voted instead to defer action until at least mid-November, earning a stern rebuke from Gov. Lawrence J. Hogan Jr. (R).

The SWARC was created by the General Assembly earlier this year to review bids for sports betting licenses that are first approved by the Maryland Lottery and Gaming Control Commission.

That panel signed off in October on the five casinos — Live! Casino in Anne Arundel County, Horseshoe Casino Baltimore, Hollywood Casino Perryville, MGM National Harbor and Ocean Downs Casino — setting the stage for the SWARC to take action on Wednesday.

But after a two-hour briefing from the attorney general’s office, the panel returned to open session just long enough to approve a request for additional information about the casinos’ owners and then adjourn.

The remaining items on the commission’s agenda were deferred until Nov. 18 without explanation. The decision to scrap expected action followed the cancellation of a commission meeting in October.

SWARC Chair Thomas M. Brandt Jr. did not respond to an email request for comment.

The delay is the latest setback for sports wagering in Maryland. It comes as the NFL season — the high point of the year for betting activity — nears its midpoint.

Speaking to reporters after the vote, Hogan issued a blunt warning about the decision not to act. “It’s a problem, and I’m sure they’re all going to be sued by all the people whose licenses have already been approved” by the lottery and gaming commission.

“If in fact they don’t act immediately and approve [the five casinos]… it’s going to be at least a year or more before anyone gets the ability to do gambling in Maryland,” he added. “And potentially it could kill the entire deal.”

In 2020, sports wagering legislation died because lawmakers could not reach agreement on how to create opportunities for minority- and female-owned firms interested in the new industry.

The bill they approved this year, following a successful voter referendum, required that 5% of the application fee paid by large casinos — as much as $2 million per facility — go to a Commerce Department fund to help disadvantaged businesspeople.

On Wednesday Hogan accused state lawmakers of circumventing the law.

“It appears as if the legislature and the staff of the legislature and even the attorney for the legislature are pressuring that commission to delay things as long as possible, until they can do all of the other, brand-new licenses where companies haven’t even yet been formed, haven’t really applied, [and] haven’t been vetted,” he charged.

After this article was published on Wednesday evening, House Speaker Adrienne A. Jones (D-Baltimore County) took to Twitter to defend the commission.

“SWARC was created as an independent commission to resist political pressure like this,” she wrote. “I’m confident the commissioners, who have been appointed by the Governor and General Assembly, will get this right.”

John A. Martin, the director of the Maryland Lottery and Gaming Control Agency, said he was startled by the SWARC’s decision to “kick the can down the road.”

“We’re obviously as disappointed as anyone on the lack of progress today in the SWARC meeting,” he said. “It was our expectation that they would move favorably on the fives entities that we found qualified.”

Each casino has an operations partner — such as FanDuel or Draft Kings — that also needs to be vetted by regulators before they can begin taking bets. But Martin said much of that work has already been completed.

“We’re already past that. They will be approved” by the Lottery and Gaming Control Commission on Thursday, he said. “We would probably be looking at a 30-45 day window to get these places fully up and running.”

“At this point, because they delayed again and put another two weeks into it, the very real possibility is that we’re not going to have anything up in 2021,” he added. “And the next thing in danger would be the NFL playoffs and the Super Bowl.”

Several of the casinos that are waiting to open sportsbooks here have set up special viewing areas and betting windows in anticipation of state approval. Some operate in states that have moved more quickly than Maryland.

It could not be determined on Wednesday afternoon whether the advice from the attorney general’s office led the SWARC to scrap action on the casinos — or whether it involved the legal requirement for a new “disparity study” to document challenges faced by female and non-white businesspeople.

Hogan said the SWARC’s “secret closed-door meeting” reminded him of the legislature’s redistricting commission, “where you don’t get to see what they do.”

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