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Sports betting booms, but the industry doesn’t contribute to Maryland’s Problem Gambling Fund

Sports betting is on pace to become the dominant form of gaming in the state while the state’s Problem Gaming Fund remains reliant on traditional casino gaming. Photo by Danielle E. Gaines.

Maryland lawmakers may need to diversify revenue sources that pay for treatment and other services offered to people who struggle with gambling-related addictions, according to a set of recommendations presented Tuesday.

Sports betting in Maryland is quickly becoming the dominant form of gaming in the state but contributes no money to the state’s Problem Gaming Fund. The imbalance comes while a growing number of younger gamblers are seeking help, said Mary Drexler, program director for the Maryland Center of Excellence on Problem Gambling.

“My biggest concern is with the online and mobile and the potential for iGaming in the next session,” Drexler said during a hearing before the Joint Audit and Evaluation Committee. “We’re moving so fast that we don’t see the full potential of sports betting, yet we are seeing an increase in calls, texts and chats that come into our helpline. We’re definitely seeing the demographic change to a younger adult population, especially now minority males.”

Legislative analysts note that the fund’s budget has always been able to cover free treatment services. Drexler said the center is unable to compete with gaming interests who constantly advertise.

“We want to do so much more with public awareness campaigns and keep them going throughout the year,” said Drexler. “We don’t have the funding that the sports world has that can spend millions and millions of dollars to get the message out on betting. We want to do more and have increased funding so that we can do better at letting Marylanders know where the resources are that can help them.”

Sports betting is on pace to become the largest single form of gambling in the state, according to an analysis of the Center of Excellence on Problem Gaming and its Problem Gaming Fund. That review was recently completed by the Department of Legislative Services.

“My projection, it’s been $3 billion through September and that’s with December of 2022 and maybe a couple of days in November of 2022, said Michael Powell, director of the Office of Program Evaluation and Government Accountability within the Department of Legislative Services. “If you project that out through the end of the year — and I’m not taking into account that it’s now football season, which I think is probably a driver of a lot of sports betting — it looks like it’ll be about $4 billion, give or take a few $100 million.”

In 2022, traditional lottery and casino gaming reached $2 billion and $2.5 billion respectively, according to the analysis.

The study of the center, which is within the University of Maryland Baltimore, presented by Powell includes a half-dozen recommendations including diversifying how the state continues to pay for treatment and other services through the center’s Problem Gaming Fund.

“It seems to me that a more rational approach would be to just say 1% of whatever’s going to the state would go to the problem gambling fund,” said Rob White, director of external affairs and business development for the psychiatry department at the University of Maryland, Baltimore. “That’s the message that we’re trying to get across.”

The center was established in 2012 and operates the problem gaming fund that includes a network of gaming addictions treatment services and a 24-hour hotline. The center also conducts studies on gaming-related issues.

The center’s budget — an average of $4.7 million between fiscal 2018-2022 — comes solely from fees from the table games and slot machines in the state’s six casinos.

Maryland’s gaming industry continues to evolve. Sen. Clarence Lam (D-Howard and Anne Arundel) worried that funding for treating problem gaming has not kept pace.

“It’s incredibly concerning that our problem gambling fund is being funded entirely by casino games — table games and slot machines — and if more people utilize mobile sports betting, doesn’t it seem likely that casino revenue will reduce and potentially the amount of funding going into our problem gaming fun will go down?” said Lam, , who is Senate co-chair of the Joint Committee on Legislative Audits

In January 2017 — the first full month of gaming for MGM National Harbor — the state licensed nearly 11,700 slot machines and 577 table games in six casinos, according to reports from the Maryland Lottery and Gaming Agency.

There are fewer slots and table games today, according to the most recent report covering September 2023.

Currently, there are 9,662 slot machines and 561 table games in those same casinos. That represents a decrease of 17.4% and 2.8% for each respective gaming type.

“There has been legislation introduced to open up the state to Internet gaming and you want to think this through. The implications of that could be tremendous,” said Lam. “It’s going to cut potentially into the casino industry, which is where most of our funding for the problem gaming fund is currently coming from.”


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Sports betting booms, but the industry doesn’t contribute to Maryland’s Problem Gambling Fund