Maryland sports betting talks in the state Senate Budget and Taxation Committee got underway today, with some businesses asking that pending sports betting legislation be changed to include more retail licenses for OTBs, and more mobile skins.
A competitive bidding process in House Bill 940 would give weight, as permitted by law, to applications from minority- and women-owned businesses entering the sports wagering industry. But some business owners testifying on the bill today think it could be more competitive.
The comments came after House of Delegates Speaker Adrienne Jones, the lead sponsor of the bill, explained the three “tenets” of the bill to her Senate counterparts in a mid-afternoon meeting.
Speaker Jones said the “House focused on three main objectives: a fair framework, increasing education funding, and maximizing meaningful opportunities for everyone. And I encourage you to consider these tenets as you begin to work on this bill.”
Proposed Maryland Sports Betting Licenses In Current Bill
The House proposal would open up 23 retail sports betting licenses and 15 mobile sports betting licenses, with 25 of the total licenses awarded through a competitive-bidding process:
- Thirteen “Class A” non-competitive (guaranteed) retail sports betting licenses would go to Maryland’s six casinos, three major pro sports venues, Riverboat on the Potomac OTB, Laurel Park race track, Pimlico race track, and the state fairgrounds. The tax rate on wagers would be 15 percent.
- Ten “Class B” retail sports betting licenses would be competitively bid through a newly-created state commission called the Sports Wagering Application Review Commission (SWARC). The tax rate here would also be 15 percent.
- Fifteen mobile sports betting licenses would not be tied to any of the retail sports betting licenses. These would also be awarded through a competitive-bidding process. Mobile wagers would be taxed at 15 percent for the first $5 million in proceeds, and 17.5 percent for proceeds over $5 million.
Only one proposed license is specifically tied to an OTB, which House Majority Leader Eric Luedtke acknowledged. Luedtke said the House decided to limit guaranteed OTB licenses to free up more competitively-bid opportunities for minority- and women-owned businesses.
The Minority- And Women-Owned Business Issue
The catch is that the bill doesn’t specifically set aside licenses for minority businesses. House Leader Luedtke said the decision to leave out a specific number of minority licenses was made after consulting the state’s Attorney General.
That said, the set number of retail and mobile licenses that are spelled out in the bill was arrived at with minority- and women-owned businesses in mind, said House Leader Luedtke.
“Our (House Ways and Means Committee) received testimony from a number of sources that suggested increasing the number of licensees would increase the potential for MBE (Minority Business Enterprise) participation. And that led us to increase both the number of Class B licenses from the original bill, and the number of mobile licenses,” he told the committee.
Call For Amendments To Maryland Mobile Betting Bill
Owners of minority- and women-owned OTBs testified before the committee, asking that the Senate consider adding stand-alone OTB retail and mobile sports betting licenses to HB 940 for businesses like theirs.
Longshots LLC and Restaurant owner Alyse Cohen told the panel her Frederick-based business could succeed as a retail licensee, without hurting casinos and racetracks.
“OTBs are already sportsbooks,” said Cohen. “They will not inherently change the business of sports betting, but rather broaden the options for patrons by providing an additional sport to bet on. Quite simply, everyone wins.”
Also seeking an amendment to HB 940 is Bet on Black LLC co-owner Malik Edwards. He asked the Senate to increase the number of mobile licenses in the bill to at least 23 — the total number of Class A and Class B licenses in the bill. Doing so, said Edwards, would help increase minority participation.
A Brief History Of Maryland Sports Betting
Maryland voters approved sports betting in 2020, allowing the legislature to proceed with a framework for Maryland sports betting implementation. That would happen under HB 940, which is on a path to final passage pending final agreement by both houses.
Maryland’s legislature must finish its work on the proposal by the close of session on April 12, if the bill is going to have a chance to make a statutory effective date of June 1, 2021.