Maryland is Falling Further Behind its Neighbors With No Sports Betting in Sight
Maryland is trailing behind its neighboring states in legalizing sports betting after the Supreme Court’s landmark ruling. In May, the Supreme Court of the United States overturned a federal law called PASPA, or Professional and Amateur Sports Protection Act that prohibited sports betting outside of Nevada and a few other states. Some states jumped on the opportunity and quickly put through legislation and its associated regulations that would permit sportsbooks. Maryland, however, is not one of those states. The unfortunate part is that several of Maryland’s neighbors have already started taking legal bets, which means that revenue from Maryland residents could be going to those states rather than staying in the Chesapeake Bay State.
Maryland’s Actions to Date
Maryland hasn’t been sitting on its laurels, however. House Bill 1014 has been passed, and it is titled “Expansion of Commercial Gaming – Referendum – Sports Wagering.” It is sponsored by five Democrat and three Republican Delegates, with the primary sponsor being Delegate Frank Turner.
Turner, who plans on retiring January 2019, is the co-chairperson of the joint Committee on Gaming Oversite. He said in an interview with WBALTV 11 that although HB1014 has been passed, which will allow sports wagering at Maryland’s racetracks and casinos, it will take a special session in order to finish the bill and then get it onto the ballot for this year in order to let voters decide. Turner said,
“But we need to have it on the ballet, so we don’t lose the revenue that we could lose over the next two years from sports gaming.”
Governor Larry Hogan will have to call that special session, but his office is arguing that the General Assembly didn’t pass the legislation this past session that would have put the sports gambling referendum on the ballot for 2018. Despite this, the governor supports the debate, and thinks it will be brought up in the next session, which means the bill won’t get onto the ballot until 2020.
The legislation this year was halted somewhat because of the questions of whether horse tracks should be allowed to apply for sports betting licenses, as the House Bill specified, or whether betting should be allowed only at casinos. The urgency of the matter wasn’t sufficient to overcome these questions.
House Bill 989 was a proactive bill that was put together in February 2018, before the SCOTUS decision, and would have legalized sports betting if PASPA was repealed. The bill, however, wasn’t sent to the governor before Legislature ended for the year. As the bill currently stands, there’s no integrity fee mentioned, which would be a tax or kickback from legal sports betting. This would need to be added as well. It’s likely that House Bill 1014 will replace it, although HB 1014 will also need to be tidied up before going any further.
Maryland Gambling and Potential Revenue
Maryland was behind most of its neighboring states in legalizing table games and slot machines, which caused a lot of moaning about Marylanders’ money going across state lines to other neighbors like Pennsylvania, Delaware, and West Virginia. So, this time for sports betting the delay isn’t as surprising.
Fiscal analysis for the state estimated a range of between $13.7 million and $181.2 million from sports betting per year. To compare, existing casinos in the state brought in over $140 million in revenue from table games and slots in April alone. Yes, sports betting has a lot of money in it, but there isn’t a lot of money in legal sports betting. In Nevada, where it’s been legal, sportsbooks at casinos makes up only about two percent of gambling revenues. Illegal gambling is where it’s at, and without huge efforts at enforcement to drive sports betting out of the black market and into legal avenues, there’s no need to rush legislation without taking the time to do it right.
Since there are several states within driving distance that have already legalized sports gambling, Maryland could potentially be losing out on a lot of revenue while it waits to legalize. Pennsylvania and West Virginia are planning on having it legal and running soon, maybe as soon as the end of September. Both New Jersey and Delaware already have sports betting up and running.
Sports betting went live in Delaware on June 5, 2018, less than a full month after the SCOTUS decision to repeal PASPA. It was the first state to start accepting legal sports bets post-SCOTUS decision, and other states are racing to follow suit. Three casinos started out accepting sports bets: the Casino at Delaware Park, Dover Downs Hotel & Casino, and Harrington Raceway & Casino. Delaware’s advantage right now is that several of its neighboring states don’t yet allow sports gambling, so the draw is there. Bets are accepted on the following college and professional sports: soccer, baseball, auto racing, basketball, football, hockey, golf, and boxing/MMA. Online sports betting is not yet legal in Delaware, but it could be at some point.
In New Jersey, legal sports betting will be allowed for collegiate and pro sporting events. Betting started at Monmouth Park Racetrack, which opened a sportsbook at the William Hill Race & Sports Bar. There are several other locations for sports bettors, like The Meadowlands who just drew in roughly $3.5 million in bets over their first 9 days of operation, Ocean Resort Casino and Borgata. There are many locations with planned launches for sportsbooks, such as Harrah’s, Caesars, and Bally’s. While not a neighbor of Maryland, New Jersey is definitely within driving distance for those wanting to enjoy a gambling weekend. And, as of now, New Jersey is showing impressive financial returns on their sports betting endeavors.
District of Columbia
The District has a thriving sports scene and would benefit from legalizing sports betting, but as of yet, that hasn’t happened. It remains unclear when or if DC will follow suit and allow legalized sports wagers.
West Virginia was actually the first state to legalize sports betting in 2018, and the WV Lottery approved emergency regulations on June 21, 2018. The state is set to allow sports wagering in September. Online betting will become legal at some point after launch. You will recall, West Virginia was also the first state toying with the idea of integrity fees, but ultimately came to their senses and decided to forego these fees.
Pennsylvania legalized sports betting in 2017, but due to their high sports betting tax and enormous fees, none of the state’s casinos have applied for a license as of yet. State officials are hoping that some kind of resolution can occur quickly in order for casinos and the state to take advantage of football season. As of now, there are no indicators as to which side will blink first. Online betting is also expected to be legal by next year.
The state of Virginia does not have any laws regarding sports betting, and there is nothing planned to do so at this very moment. However, there are reports of several state lawmakers looking to get a sports betting bill or two on the books by early next year.
Final Thoughts on Maryland
To some, Maryland is taking a practical approach and they see this delay as a good thing. They contend that it will give lawmakers some time to look to at other states and see what should and can be done, for the best results for all stakeholders, to determine what tax rates work the best, and to decide what kinds of locations, where, and how many would be in Maryland’s best interests.
In my opinion, I fall on the side of the fence that believes Maryland dropped the ball and should be working at a more urgent pace to get sports betting up and running in their state. Unlike states like Iowa or Michigan who don’t have any neighbors with legal sports betting, Maryland has several. And, they’ve already seen what it’s like to lose the money from in-state residents to out of state casinos. Maryland is actually doing more harm with their tortoise like pace then they are doing good. Once Pennsylvania gets their sports betting situation figured out, Maryland will lose even more money.
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