Lawmaker wants window on sports betting applications re-opened

Maryland has an abundance of unissued sports wagering licenses that one state delegate says should not be allowed to gather dust.

Currently, there are 12 physical sports book locations. The state also has a dozen mobile sports wagering apps in operation. State regulators say instability in the market and ongoing consolidation mean no more are needed yet.

Even so, some want to see the Sports Wagering Application Review Commission — sometimes called SWARC — continue to accept applications from businesses who still want to enter the industry.

“There’s a lot of dead spots, I guess I would say,” said Del. Jason Buckel (R-Allegany), a member of the House Ways and Means Committee. “There’s very few on the Eastern Shore. For Montgomery County with 1.1 million people, there’s one in all of Montgomery County. There’s dead spots kind of all over the state.”

Buckel told Maryland Lottery and Gaming Control Agency officials that remaining licenses for physical sports books should be issued to businesses who qualify.

House Minority Leader Del. Jason Buckel (R-Allegany). File photo by Danielle E. Gaines.

John Martin, director of the agency, told Buckel and the committee, during a briefing in Cambridge on Tuesday, that the application window closed last October.

“There is currently no provision in law to offer another enrollment period,” Martin said.

The 24 current licenses in operation and 10 more Martin described as “in the pipeline” are far fewer than the total number available under a 2021 law.

The two-year old law authorized a total of more than 100 licenses.

Included were 17 so-called automatic licensees assigned to specific locations for which those businesses simply needed to apply. Those locations included the state’s six casinos, the Pimlico and Laurel race courses, the Maryland State Fairgrounds in Timonium, three professional sports stadiums, and several existing off-track betting parlors and bingo halls.

Additionally, the General Assembly created 30 licenses for physical locations and another 60 mobile licenses.

“If you do the quick math, that’s 107 sports books,” said Martin. “That’s a lot. The reality is we’re nowhere near that now.”

The intent was to set up a competitive application and award process. The Sports Wagering Application Review Commission later voted to forego that competitive process if the number of licenses exceeded the number of qualified applicants.

Buckel noted that roughly one-third of the available licenses set aside for brick-and-mortar locations are mothballed.

“That would seem to frustrate the legislative intent of adding the licenses,” said Buckel. “It basically means that they’re nullities if you’re not going to take any more applications for them.”

Buckel said he believes there is a market for bars and restaurants who may want to add sports betting as an ancillary income source.

Buckel said he intends to sponsor a bill in the 2024 legislative session that would require regulators to accept applications for the remaining licenses.

Randy Marriner, Maryland Lottery and Gaming Control Commission Chair and a member of the Sports Wagering Application and Review Commission. Photo by Bryan P. Sears.

“No one has been beating down our door saying let me in,” said Randy Marriner, chair of the Maryland Lottery and Gaming Control Commission and a member of Sports Wagering Application Review Commission.

Regulators also say the market is in flux.

“I think SWARC is trying to see what the field is going to be like, if there is going to be some mergers and acquisitions of the mobiles, if some of the retails are still going to be up and running,” said James Butler, assistant deputy director of the Maryland Lottery and Gaming Control Agency.

WynnBet recently announced it was shutting down sports betting operations in eight markets. In Maryland, they told regulators they would return the license awarded to them, foregoing a licensing fee. The company has never taken a sports bet in Maryland.

“We may even see further consolidation in the sports wagering industry,” said Martin. “That’s just the reality of it. The numbers here are just not sustainable.”

Additionally, a retail licensee in Boonsboro has yet to take bet because they cannot find an established operator.

Operators — companies such as FanDuel, DraftKings, BetFred and William Hill — partner with licensees and manage the licensed sports book and set odds.

The state may want to just wait to see “how this market is going to settle down, whether they’re going to be sort of mergers and acquisitions, especially on the mobile front,” said Butler.

Butler urged Buckel and the committee to wait six months to a year to allow the market “to settle down” and see if there were additional mergers or acquisitions “especially on the mobile front.”

The state agency recently reported more than $25 million in revenues last year from sports wagering. They expect that it could grow to $30 million this year.

What surprised regulators was that 95% of the wagering is being placed via mobile apps.

“That was a revelation to us,” said Martin. “So, it’s going to make a challenge for retail locations, as well as mobile, because the market shares are really focused on a handful of key players in those segments. And that’s something that I think is just going to play out over time.”

“It’s mobile that has driven and will continue to drive the train,” he said.

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