The Maryland Sports Wagering Application Review Commission (SWARC) unanimously approved a policy amendment Friday requesting companies awarded a mobile betting license in Maryland to submit a diversity plan. As the body works out the regulations, the mobile betting launch will not be in place for the NFL kickoff, potentially delaying months.
The plan must be submitted to the Commission within 30 days after licensure approval and should include strategies to obtain a diverse group of owners or contractors, conduct diversity-related events and proposed timelines and benchmarks to achieve diversity objectives.
Applicants must also state they will make a “good faith effort” to meet the objectives, report diversity metrics to the Maryland Lottery and Gaming Control Commission, and make their plan available to the public.
According to the addendum, SWARC will “consider any type of diverse group where an applicant can demonstrate that an individual has been disadvantaged and, therefore, the inclusion of the individual as a participant in the Diversity Plan would be beneficial,” reports WTOP.
Should the diversity plan be deficient, the license still would not be canceled, according to Assistant Attorney General David Stamper, as reported by Maryland Matters. James Butler, managing director of organizational compliance with the state’s Lottery & Gaming Control Agency, said that agency and the commission would work with an applicant to take any corrective action plans necessary to ensure they meet diversity standards.
The legislature pushed for equity in the sports betting industry when it approved legislation last year, especially after predominately white-owned businesses received licenses when the medical cannabis industry launched in Maryland five years ago. The law also aims to ensure that entrepreneurs from Maryland have a fair chance to compete against larger betting companies such as FanDuel and DraftKings.
Even though this move intends to be inclusive and promote a competitive and solid patchwork in the sports betting industry, it is yet another delaying measure for the launch of mobile sports wagering in the state. With the NFL season beginning this week, Maryland’s expected launch date for mobile betting appears to have been pushed back once again, thus missing out on the most lucrative part of the sports gambling calendar.
Maryland has already had one of the nation’s slowest launches into what last year was a $4 billion mobile sports betting industry. Roughly $15-$25 million in state revenue is at stake, little compared to Maryland’s casinos that, by comparison, generated $76.1 million for the state in July alone.
When Maryland legalized sports bets in December, Lottery and Gaming Director John Martin was confident that by football season this fall, the industry would already have its mobile format authorized by the state.
Maryland policy makers refused to let the industry fully launch until they figured out how to ensure sports betting licenses went to a diverse set of owners. “I’ve heard ‘Why is everybody blowing right by us? What’s wrong with Maryland?” Martin said, as reported by The Washington Post. “There’s not anything wrong with Maryland. It’s more comprehensive.”
John Martin.
On average, companies will spend $300 for each mobile customer they acquire, and in the aggregate mobile gaming operations will lose hundreds of millions before they turn a profit in two to three years. It’s a very challenging environment for a small, mom-and-pop company.
Thus, Maryland has committed by law to letting those smaller companies try to compete, and looked for ways to make the industry as inclusive as possible. The first set of sports betting licenses, which require in-person betting at a facility, were already awarded to the state’s existing casinos at the end of last year, as well as a few smaller brick-and-mortar locations.
The next round of so-called licenses, along with another 60 to create the mobile betting industry, were designated in state law to be awarded only after the state conducted a disparity study that reviewed whether minority- and women–owned firms faced discrimination in sports gambling.
The commission will now finally start accepting applications for mobile sports betting licenses next week. As for when bettors can gamble on their phones in Maryland, Martin said that the end of the calendar year is “a good bet.”
