Sports betting license contraction possible, industry eyes new gaming in Maryland

Maryland sports gaming may be about to enter a period of contraction, according to the head of the Sports Wagering Application Review Commission.

At least one sports betting licensee has already announced it will surrender its license before taking a bet in Maryland. Thomas Brandt, chair of the commission, hinted that more may be on the horizon.

“I think I’ve heard about a couple of incumbents looking at exits in various ways,” said Brandt during a Wednesday commission meeting. “You know, this market seems to have taken its near-term, if not long-term, structure with the dominant handful of mobile operators. That seems to be the environment we’re in.”

Brandt’s comments echo those made by the head of the Maryland Lottery and Gaming Control Agency last month.

Sports wagering in Maryland is on track to top $4 billion this year. The figure includes monetary incentives offered by sports books to attract players. Even so, the annual amount would make it the single largest form of gaming in the state, outpacing the six casinos and traditional lottery.

Even so, the state has dozens of licenses that have not been awarded since a window for applications closed last year.

“We’ve only had a couple of random inquiries, whether it’s going to open and when but nothing major,” said James Butler, assistant deputy director of the Maryland Lottery and Gaming Control Agency. “Only a couple of people have inquired about that.”

Similarly, a Chicago-based consultant hired by the application review commission, commonly referred to as SWARC, said inquiries about reopening Maryland’s process have been minimal.

“We received one call at Taft about a month ago from an attorney representing a sports betting operator supposedly that said ‘Are you going to reopen the window? We have a client that might be interested,’ We haven’t heard any follow up,” said Cezar Froelich, a partner at Taft Law.

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

Included were 17 so-called automatic licensees assigned to specific locations. The locations include many previously licensed to accept wagers on horse racing and the state’s six casinos. Other automatic licenses included the state’s three professional sports stadiums and two bingo halls.

The General Assembly created 30 licenses for physical sports books. Another 60 were set aside as mobile licenses. Currently, the state has awarded 13 physical sports book licenses and a dozen mobile applications.

Mobile licenses, however, dominate the sports wagering market in Maryland.

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.

Of that, 95% of wagering is through licensed mobile applications.

The panel Wednesday approved the award of a license to MSF Sports, Inc., a subsidiary of the Maryland State Fairgrounds.

More than a half-dozen licenses remain in the pipeline. Investigations are not yet complete, and the commission may not meet again until after the first of the year.

Gaming regulators are investigating applicants for five additional mobile licenses, one facility operator license and one license for an unnamed applicant that falls within the named facilities guaranteed a license.

Those reviews are not expected to be completed before the end of the year. The commission is tentatively scheduled to hold its next meeting in January.

WynnBet recently announced it was shutting down sports betting operations in eight markets. The company decided to turn its license in before accepting a single wager in the state. WynnBet forfeits a licensing fee already paid to the state.

“Obviously it’s a very competitive market and I think we’re seeing a lot of consolidation and a lot of folks you know, just starting to exit markets,” said Kimberly Copp, co-chair of Taft’s gaming group. “We haven’t had anyone, at least at Taft, seriously pushing us to open the window.”

Froelich told the panel that a global gaming convention held in Las Vegas last week was abuzz with talk of the next big gaming opportunity in Maryland.

A bill to legalize iGaming failed in the 2023 legislative session. Instead, lawmakers asked state gaming regulators for a report on the merits of the activity. That report is expected before the legislature returns in January.

“The big story at G2E was iGaming and the presumption that it will happen in Maryland sooner than many other states,” said Froelich. “There was a significant amount of buzz about that report that’s supposed to come out and … it seemed as if that conversation was overwhelming any conversation about sports betting in Maryland.”

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