Overview: Online Sports Betting In Maryland
While the rest of us were watching the electoral college map, Maryland gambling proponents were watching Question 2. It was Maryland’s second state ballot measure, and it would legalize sports betting. It passed with 67.1% of the vote, indicating a strong desire from Marylanders to legalize sports betting. Some representatives voiced the usual concerns about the morality of gambling. But the measure had support from both parties and the teacher’s union. Sports betting profits will go to K-12 public education. But Maryland has to figure out all the implementation problems, leaving key industry details unknown, including whether the state will offer online sports betting.
How Maryland Legalized Gambling
Maryland’s long-standing ban on casinos only ended recently. In 2008, Marylanders voted to allow slot machines and casinos for the first time since the 1960s. Voters approved the expansion of table games in 2012, too. 2020’s vote in favor of sports betting may give the impression that Maryland voters love gambling. But gambling votes haven’t always been 70/30 blowouts. Here’s how close the main gambling measures were over the last 13 years:
The 2020 vote shows increased acceptance of gambling – especially when the money is presumed to fund public education. But 2012 stands out as an outlier. It barely passed compared to the other two. Are Marylanders averse to table games, but okay with slot machines, casinos, and sportsbooks?
|2008 – Casinos
|2012 – Table Games
|2020 – Sports Betting
Did You Forget That Campaign Money Matters?
The 2012 gambling expansion campaign was unique for one reason. It pitted gambling giants against each other. MGM Resorts had plans to build an $800 million resort and casino along the
Potomac at National Harbor. It was obviously in favor of expanded table games. However, Penn National Gaming was against the measure.
That sounds surprising until you learn about Penn National’s casino plans. Penn National Gaming was building a casino in Charles Town, West Virginia. It’s only an hour and a half away from Prince George county. It was close enough that analysts determined Penn National’s new casinos would lose money if Maryland expanded table games. Both companies poured money into opposing sides of Question 7. But jobs, education funding, and reclaimed Maryland gambling dollars from West Virginia were more appealing than anti-gambling sentiments.
What Happens Now That Sports Betting Is Legal In Maryland?
Maryland has a unique approach to legalizing sports betting compared to other states. Usually, after voters approve sports betting or the Governor signs the bill, a Gaming Commission creates industry rules.
However, in a unanimous vote, the Legislature gave the Lottery and Gaming Commission permission to issue sports betting licenses. However, Maryland broke from other states by leaving critical details up for debate in the legislature.
For example, we still don’t know whether Maryland will offer online sports betting, retail sports betting, or both. Other states cover those details in their bills and state votes. Maryland is going to duke it out in the General Assembly instead.
That may make Marylanders anxious. It has a Republican governor and a Democratic Assembly. However, sports betting is a bipartisan issue in Maryland. Both parties want increased education funding, job creation, and Marylanders to stop gambling in neighboring states. There’s hope for bipartisanship on this issue, but the timeline remains sketchy. AP News reported that Marylanders could place sports wagers by summer 2021. But as we learned from watching Michigan online sports betting, these launches can be hard to predict. (The blogosphere predicted Michigan would go online “soon” since summer 2020. Online gaming went live in January 2021.)
How Profitable Will Maryland Sports Betting Be?
There are two estimates of potential sports betting revenue. One is a widely-reported estimate of $20-40 million in Maryland tax revenue. It amounts to a shoulder shrug since the tax rate is still unknown.
However, an earlier analysis projected Maryland to make $18.3 million from sports betting in the fiscal year 2022. In March 2020, the Maryland Senate passed a sports betting bill with a 20% tax rate. But when the bill passed in the House, all the details were removed and led to the “yes/no” question Marylanders voted on in November. That $18.3 million figure assumes a 20% tax rate. But until the General Assembly decides on a tax rate, we’re all competing for the best guess.
Maryland Online Sports Betting
Online sports betting is likely if a competitive industry is a priority for Maryland legislators. In the wake of the pandemic, legalizing sports betting can generate revenue without raising taxes. That’s especially enticing to a Republican Governor. We’ll see where tax rates and revenue projections come out, but be cautiously optimistic about online sports betting – or questions to be definitively answered about it – coming to Maryland in 2021. (Sure, that sounds obvious, but without inside knowledge of the Maryland legislature, what else do you want?)