Maryland Legislature Passes Sports Wagering Bill with Expansive Licensing Opportunities and Targeted Support for Women and Minorities

The number of sports wagering licenses in Maryland may ultimately reach the triple digits after  House Bill 940 was overwhelmingly approved by both chambers of the legislature on the last day of the state’s 2021 legislative session.  Surrounded by four states and the District of Columbia, which all offer live wagering, the legislature continued its game of catchup by passing the bill as an emergency bill, which will allow it to take immediate effect upon the signature of Governor Larry Hogan.  With a House vote of 122-16 and a Senate vote of 47-0, the expansive legislation creates opportunities for land-based licenses at in-state casinos, racetracks, professional sports stadiums, State Fairgrounds, simulcast betting facilities, bars, and restaurants and also for mobile licenses.

The legislation creates Class “A” and Class “B” licenses, which will be awarded by a legislatively-formed Sports Wagering Application Review Commission (“SWARC”), subject to suitability investigations by the Maryland Lottery and Gaming Control Commission, which will regulate sports wagering.  Class “A” licenses can be awarded to A-1 facilities, which are casinos with more than 1,000 video lottery terminals (Horseshoe Casino, Maryland Live! and MGM National Harbor) and A-2 facilities, which are casinos with fewer than 1,000 video lottery terminals (Rocky Gap, Hollywood Casino and Ocean Downs), racetracks and the state’s three major professional sports teams’ stadiums.  Additionally, the legislation permits the award of Class “A” licenses to future professional hockey (NHL), professional basketball (NBA), or professional soccer (MLS) A-2 facilities in the event such teams enter the state.  A-1 licenses require a $2 million license fee and A-2 licenses require a $1 million license fee.

Class “B” licenses may be awarded to the Maryland State Fairground, four simulcast betting facilities, two electronic bingo facilities, and up to 30 additional businesses, including bars and restaurants.  Class “B” licensees with more than 25 employees and $3 million in annual revenue, are subject to a $250,000 license fee, whereas smaller Class “B” licensees will be subject to a $50,000 license fee.  Class “B” licensees must be at least 15 miles away from a Class “A” licensee located in Allegany County, Cecil County, or Worcester County or 1.5 miles away from a Class “A” licensee located in any other county or another Class “B” licensee.

Up to 60 mobile-only licenses may be awarded and each is subject to a $500,000 license fee.  Additionally, all licensees are subject to a 15 percent tax on gross gaming revenue.

The bill also creates a first-in-nation set of requirements intended to support minorities, women, and minority and women-owned business.  Specifically stating, “It is the intent of the general assembly that [the sports wagering legislation] is to be implemented in a manner that, to the extent permitted by state and federal law, maximizes the ability of minorities, women, and minority and women-owned businesses to participate in the sports wagering industry, including through the ownership of entities licensed to conduct sports wagering under [the sports wagering legislation].”

To accomplish the stated goal, the legislation requires that if an applicant is applying for a sports wagering license, the applicant must submit an affidavit attesting to the number of minority and women owners of the applicant, the ownership interest of any minority and women owners of the applicant, and the number of minority and women employees of the applicant.  Further, each applicant must again report this information to the Maryland State Lottery and Gaming Control Commission on or before July 1 of each year.  Additionally, when evaluating the applications for class B-1 or B-2 licenses, the SWARC shall, “Consider allowing early access to the mobile sports wagering market to entities with a meaningful partnership with minorities, women, and minority- and women-owned businesses.”

Key Components

  •  Potentially more than 100 licenses, including:
    • 60 mobile-only
    • 30 businesses, which may include bars and restaurants
    • Six Casinos – MGM National Harbor, Horseshoe Casino, Live! Casino and Hotel, Ocean Downs, Rocky Gap Casino Resort, Hollywood Casino
    • Four satellite simulcast betting facilities in Charles County
    • Three professional Owners of FedExField, the Baltimore Ravens, and the Baltimore Orioles
    • Future NHL, NBA, or MLS facilities
    • Two racetrack – Pimlico Race Course and Laurel Park
    • Two electronic bingo facilities
    • Maryland State Fairgrounds in Timonium
  • 15% tax rate
  • Annual license fee:
    • $50,000 for a Class “A” Sports Wagering Facility
    • $10,000 for a Class “B” Sports Wagering Facility
    • $100,000 for a Mobile Sports Wagering License
  • Five-year license terms
  • License renewal fee equal to 1% of the licensee’s average gross gaming revenue for the preceding three-year period
  • Must be 21 or older to wager
  • Independent, non-gaming entities may open retail sportsbooks
  • Wagers not claimed within 182 days after winning are distributed to problem gambling fund

If you have any questions about this please contact Robert L. RubenSteven J. Brody, or any of the attorneys in our Gaming Industry Group.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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