Maryland is on the cusp of bringing sports betting online. In November 2020, Maryland voters approved sports betting’s legalization. After that, lawmakers were obliged to create a legal framework for sports betting to operate within. In April 2021, Maryland lawmakers sent a bill to the Governor’s desk, where it’s expected to be signed. However, the unsigned sports betting bill hasn’t stopped casinos from laying the groundwork for their new retail sportsbooks. Live! Casino and Hotel opened its retail sportsbook space, Sports and Social. The sportsbook isn’t running yet, but space is prepared.
But one thing sets Maryland’s sports betting industry apart from all the others in the United States. Many states set maybe 10 to 20 sportsbook operator licenses for their Gaming Commission to award. Maryland is offering 60 licenses. That means there’s room in Maryland’s sports betting market for 60 mobile sportsbooks.
Maryland’s goal isn’t just to be attractive to large sportsbook operators. It’s also made sure that small businesses can get in on the game, too. That way, those 60 licenses won’t go to waste.
How Maryland Is Accommodating Small Businesses
Clearing room for small sportsbook companies means more than offering many licenses. Those licenses are also priced with diverse business models in mind. Here are the license prices Maryland’s bill proposes:
These tiered licenses are for sportsbook companies of different sizes. The license renewal fees are 1% of average sports betting revenue. So, from the initial application fee to the renewal fee, Maryland has given businesses of all sizes room to operate in this industry.
Why Small Businesses Are Critical For Healthy Sports Betting Industries
Large companies with long histories have business models that clearly work. A track record of proven success is something that any business would be proud to have. But even with the massive resources available, large companies can only innovate so much. They can come up with exciting new products. But few can reinvent themselves from the ground up or change their business models completely.
Startups, on the other hand, can try radically new ideas. They can build themselves around groundbreaking innovations or insane new concepts. It’s one reason that many of them fail. But, executed successfully, a new idea can deliver something to customers that would’ve never been available before.
PointsBet is a great example of a startup that brought something new to the sports betting industry. It’s an Australian company that offers standard fixed odds betting lines. However, it also offers Points Betting, which rewards players for making precise guesses about point spreads and point totals. It’s proven to be popular, and it’s won industry awards. Leaving room for startups to challenge large companies and keep them on their toes will promise more companies like PointsBet.
A Few Bad Things To Watch Out For
There are many great things to be said about a thriving group of startups. However, that doesn’t mean that small businesses will replace big brands like DraftKings, FanDuel, or BetMGM. It doesn’t even mean that the first 40 startups that obtain licenses will remain in the industry. It just means that there will be an ever-changing group of startups that will test new products, ideas, and business models.
One of the red flags to watch for, however, is a FOMO-run startup industry in Maryland. FOMO is a business school word for making stupid choices because everyone else is making the same stupid choices. (It actually stands for ‘fear of missing out, but functionally, the two definitions are equivalent.) Sports betting is a hot new industry right now because it’s young and full of promise. Investors will hope to get in on sports betting early to reap massive returns over time.
However, they will have to avoid falling into the FOMO trap. If a sports betting company pitches a bad idea or whose business plan doesn’t quite add up, that has to be the deciding factor in whether to fund it. FOMO can override good business sense and send money where it shouldn’t be sent.
There’s going to be a lot of positive coverage about Maryland’s sports betting startup scene. But it will need to be tempered with caution. The first star sports betting entrepreneur in Maryland may not be that great. They could be a star, a dud, or exceedingly average. Sports reporters will have to be just as discerning about sports betting stars in Maryland as the investors who fund those alleged stars.
Maryland’s Bright Future
Maryland’s sports betting market could produce the next major innovations in the sports betting industry. It’s created a legal framework that creates space for a thriving startup segment of the sports betting industry. However, investors and reporters alike will have to avoid falling for the hype. In an industry that promising, that’s the biggest trap.
But those are good risks to have. They’re certainly preferable to risking an uncompetitive sports betting industry next to New Jersey and Pennsylvania. If Governor Hogan signs Maryland’s proposed sports betting bill, he’ll potentially sign the most competitive and innovative sports betting industries into law.
However, that will only be true if Maryland commits to protecting its small businesses. Living up to that promise will be Maryland’s defining project as it builds its sports betting rules out and oversees large and small sports betting businesses.