The house ways and means committee held a four-plus hour hearing on Monday on Representative Vanessa Atterbeary’s HB 17. The bill would allow for statewide online casino licences tethered to existing casinos and digital sports betting licensees. It differs from a bill that passed through the house in 2024. Atterbeary said that in response to her colleagues’ concerns, HB 17 would ban funding accounts by credit cards.
She also suggested that a constitutional amendment might not be needed to add igaming. Traditionally, any expansion of gaming in Maryland has gone to the voters. But Atterbeary pointed to the three referendums in Maryland that legalised video lottery terminals (2008), table games at land-based casinos and the addition of a sixth casino (2012) and in-person and online sports betting (2020). She said the voters have already spoken and embrace digital casino.
Atterbeary also touched on a subject that has become a top-level concern for the gambling industry – sweepstakes. The unregulated digital gaming platforms operate across the US, mostly in a grey area. That means they are not explicitly legal or illegal. The sites draw players in with free-to-play games, but consumers can ultimately buy and win “coins” or “tokens”.
Atterbeary and proponents of her bill said a legal market can create a framework to help tamp down the black market. She shared that the state had already sent letters to 12 sweepstakes operators. Surprisingly, she said, six replied and said they believe their business is legal in Maryland. But the state has no law it can cite to stop them.
No consensus
Like the senate hearing on 30 January, the house committee took no action on legal igaming. The general assembly is scheduled to be in session through 7 April, but the crossover deadline – when bills must be sent from one chamber to another – is 17 March.
The legalisation of online gambling in Maryland has created a clear rift among stakeholders. Anti- and responsible gambling advocates testified. They said introducing online casino would only increase the number of Marylanders at risk of gambling addiction.
Mary Drexler of the Maryland Center of Excellence on Problem Gambling cited Morgan State University research that shows that 75% of those with exposure to igaming report gambling problems compared to 22% of those not exposed to online gaming.
But perhaps more surprising is that the legal gambling industry is fighting among itself. BetMGM, Sports Betting Alliance (SBA) and iDevelopment and Economic Association (iDEA) representatives argued that online casino grows the industry and creates more tax revenue. BetMGM, DraftKings, Fanatics Betting & Gaming and FanDuel comprise the SBA.
But more mid-sized operators the Cordish Companies and Penn Entertainment argued that online casino cannibalises their brick-and-mortar properties. And Sean McDonough, representing Penn, went on to say that the company would support the bill if licences were limited to the six existing casinos.
Such a rift could prevent legal online gambling from gaining traction as an issue or moving forward this session.
Smaller locations want “equal playing ground”
Smaller gaming companies in Maryland were also split. The state’s sports betting law allows for two bingo halls and four OTBs to also have digital sports betting licences. Those companies – many owned by minorities or women, as mandated by the state – are also on opposite sides of the expansion.
“Igaming is a form of gaming that would be new to the state and existing casino companies have already profited greatly from their brick-and-mortar” facilities, said Sidh Sushant on behalf of Delta Bingo. “We believe this should be a clean slate and that tethering only to casinos would be a mistake.”
Alyse Cohen, owner of Long Shots OTB and Sportsbook, told the committee: “As Maryland decides how to best legislate igaming, I would urge the committee to set an example of how to promote small businesses and not only the behemoths that are the casinos.
“These smaller retail outfits are integral parts of Maryland’s gambling network and, thus, all deserve an igaming licence. More importantly, I am deeply concerned that these sportsbooks will fail if not given the chance to offer igaming and in turn compete on an equal playing ground.”
Pennsylvania a good comparison?
But Bobby Jones, on behalf of Ocean Downs, an OTB and casino, said her company opposes adding legal igaming. She said that after watching what happened in Pennsylvania, which is one of seven states with legal online casino, Maryland can’t afford the job losses. Jones said that, in Pennsylvania, brick-and-mortar casinos saw a 15% decline in revenue and 45% of jobs were lost. Her company has a sister gambling venue in Pennsylvania, Presque Isle.
“Jobs disappear,” she said. “Businesses are lost and suffer.”
Pennsylvania was a key topic of conversation in Maryland Monday. Advocates pointed to increased top-line revenue for the gambling industry after igaming was introduced. But the state has also added more casinos – two Las Vegas-style venues and three mini casinos – since online gambling was legalised in 2017.
John Pappas, who testified in favour of the bill on behalf of iDEA, said that “jobs are growing, even with igaming” in Pennsylvania. He pointed to live-dealer studios as places that employ people in the state. The Maryland proposal would allow for live-dealer studios, which must be staffed 24 hours a day.
Opponents say the numbers don’t translate and won’t trickle down to smaller properties. And committee member Jason Buckel said “there will be no more casinos in my political career”. He also lamented the general shift in the US from doing things out in the community to being more isolated.
“We’re becoming a tech-oriented world,” he said. “It is becoming normalised that we only do this on our phones.”
Original article: https://igamingbusiness.com/gaming/online-casino/maryland-house-hearing-igaming-rift/
