MD Online Casino Bill Faces Roadblocks in Senate After House Passage

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A Maryland online casino bill made its way to the Senate committee but was met with significant roadblocks to the point that there was no vote on the bill this week. The bill, HB 1319, passed the house with a 92-43 majority earlier this month.

Bill sponsor Vanessa Atterbeary said legislation would control an industry that is already thriving in the black market. The bill would introduce online casinos in a state that presently has a flourishing retail casino industry, but those benefits were outweighed by the possibility of the online market cannibalizing the retail sector as well as increasing gambling addiction.

“We already have iGaming going on in the state of Maryland,” Atterbeary told the committee. “It is illegal. You have folks going on their phones or their computers and doing iGaming with somebody in Curaçao or somewhere far away, not here in the state of Maryland. It is incumbent on us to capture that market, regulate it and get rid of the illegal market. You can put safeguards on it and protect folks that are worried about problem gaming.”

Maryland is one of a handful of states seriously considering legalizing online casino gaming this year. However, time is running out for the state with the proposal having to pass the Senate committee and the Senate floor before April 8, when the General Assembly is set to adjourn.

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What Is HB 1319?

HB 1319 essentially is a bill that documents the reasons for Maryland to consider passing legislation to introduce online casinos in the state. It promises a highly regulated industry, and one that would bring significant tax revenue to the state like other states that have legalized online casino gaming in addition to retail casinos.

According to the official document, the bill’s summary includes:

“Authorizing the State Lottery and Gaming Control Commission to issue certain licenses to certain qualified applicants to conduct or participate in certain Internet gaming operations in the State; authorizing the Governor, on recommendation of the Commission, to enter into certain multijurisdictional Internet gaming agreements; providing that certain payments to certain former video lottery employees may not be subtracted from the calculation of a certain benefit; submitting the Act to a referendum; etc.”

The bill has undergone several changes as it traversed through the house across three readings. The bill suggests a maximum taxation rate of 55% on electronic games, with live dealer games taxed at 20%. Operators would have to pay a fee of $1 million for a five-year license. The renewal fee would be equal to 1% of the average annual profit of the preceding three years.

One amendment to the bill included the banning of credit cards as a method of depositing money. “Maryland online sports bettors may fund their accounts with credit cards. By prohibiting credit card usage for online casinos, it prevents companies that offer both iCasino and sports betting from sharing wallets for their products.”

The bill also suggested that the six casinos currently operating in Maryland could apply for a license but a social equity partner must own at least 5%, either directly or indirectly, of that casino. Between five and 18 digital gambling licenses would be made available for purchase via a bidding process, with the first round of that bidding reserved for social equity applicants.

Concerns Around Cannibalization

There have been several concerns raised around online casinos eating into the business of retail locations, called self-cannibalization in the casino sector. Atterbeary’s bill earmarked $10 million for casino members currently employed in the retail section.

A recent study from Eilers and Krejcik Gaming, in fact, refuted the claim of cannibalization. With data from casinos, state governments, and lawmakers, the study concluded that retail casinos face very little negative impact from the presence of online casinos, particularly because both demographics are fairly different from each other. The conclusion of that study indicated that a regulated online casino market could even have a positive impact on casino revenue for land-based operators.

“There is still a misconception that online casino play cannibalizes land-based casinos. But iGaming’s competitors are Netflix and Candy Crush—not casinos,” Thomas Winter, former SVP of Online Gaming at Golden Nugget Atlantic City, said.

Even if lawmakers can find a way to pass legislation, online casino gaming would only see action in 2025 at the earliest. Maryland has had a history of a long turnaround time from passing legislation to establishing gaming action, like many other states. Online sportsbooks were introduced in the state in Nov. 2022 after being passed and approved more than two years earlier.

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About the Author
Nikhil Kalro

Nikhil Kalro

Nikhil Kalro is a sports betting writer at Gaming Today. With an interest in strategy and mathematics, applying that to sports writing was the natural progression. Nikhil’s previous experience includes working with ESPN for five years. His specializations include soccer, football, basketball, tennis, and esports betting.

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