Maryland sports betting bill HB 940 should be at the governor’s desk today after lawmakers approved retail and online sports betting in the state. The Maryland General Assembly cut it close, approving the bill on the final day of the 2021 session. It took them nearly five months from voter’s approval at the ballot box in November to sending a finalized text to Gov. Larry Hogan to be signed into law.
The inclusive sports betting bill that was passed Monday will allow as many as 60 online sportsbook operators and 30 retail sportsbooks across casinos, professional sports stadiums, small businesses, and various other entities. Maryland sports betting is expected to launch by fall ahead of the 2021 football season.
Last Day Approval
Maryland sports betting bill was passed at a very critical juncture as Monday was the last day of the General Assembly’s regularly scheduled session for 2021. The Senate approved HB 940 on this day by a 47-0 vote. The bill originated in the House of Delegates, which had passed the bill on March 11, and it approved the final version hour after the Senate’s approval by a 112-16 vote.
The original House version of HB 940, sponsored by Speaker Adrienne Jones, placed limits on the number of licenses. The Maryland Senate Committee later made various amendments. They removed the online operators’ cap, and created four separate categories for retail sportsbooks, with various fee structures favoring small businesses. Both chambers reached a last-minute compromise over the limits of the licensees, which still allows a huge number of sportsbooks to operate in the Old Line State. Tennessee and Wyoming are the only uncapped sports betting markets in the US.
The extraordinary development follows a two-thirds majority approval by Maryland voters who favored sports betting, paving the way for lawmakers to amend the state constitution to allow the industry. Bi-partisan support for legalized sports betting in the Democratic-led House and Senate has been wrestling through for months to bring about minority and women-owned business participation.
Further Details of HB 940
The agreed and amended version of HB 940 allows for up to 60 online sportsbooks and 30 land-based sports betting facilities, and four different license options to provide industry access to multiple types of businesses. For online sports betting, there is only one operating license across the board. However, retail sportsbook licenses are divided into “Class A” and “Class B”.
Class A includes Maryland’s six casinos, racetracks, and three professional sports arenas where the Ravens, Orioles, and Washington Football Team play. The application fee ranges from $1 to $2 million, depending upon the size. On the other hand, Class B includes seven designated businesses, including two bingo parlors, OTBs, and the Timonium Fairgrounds. An additional 30 licenses, which will be sub-categorized as B1 or B2 depending upon their size, will be awarded to businesses like bars and restaurants. Larger businesses will pay a $250,000 license fee while smaller ones will have to pay a $50,000 application fee.
A sports wagering application review committee will review and give licenses, and online licenses will give preference to digital operators with considerable minority and women participation. Under a provision, a pot of money will be funded to assist small retail applicants from license application fees from larger retail applicants. A proposed tax rate of 15% for all sportsbook operators.
It’s too early to tell which sportsbooks would enter the market, but Marylanders should expect most if not all industry leaders to launch in the near future, especially with the plethora of licenses available. The first sportsbooks to launch would likely be those attached to the state’s large commercial casinos, most of which already have sportsbooks partners. MGM National Harbor will likely launch their BetMGM product, the Horseshoe Casino in Baltimore will be using William Hill as their operator, and Hollywood Casino Parryville will use Penn National’s Barstool Sportsbook.
According to the fiscal note, an annual impact of up to $19 million annually is expected from Maryland sports betting for the 2022-2026 fiscal years. Although rules do need finalizing once the governor has signed the bill into law, we can anticipate the launch of Maryland sports betting in fall 2021, ahead of the NFL season.