Maryland state regulators gave initial approval today to mobile sports betting regulations that could put mobile sportsbooks online in the Old Line State later this year. Just don’t expect to see racial and gender-based licensing criteria among today’s approved rules.
Those criteria were excluded from the Sports Wagering Application Review Commission (SWARC) proposed regulations for mobile and additional retail licenses to “avoid further delays” in awarding those licenses under a 2021 state law, SWARC chair Tom Brandt said at today’s commission meeting.
Today’s action appeared to be a significant departure from SWARC’s intent to maximize minority and women-owned business participation in the state’s sports betting industry, as required by the 2021 law. But it will also allow the Maryland regulatory process to proceed, with further changes possible down the road.
Now the regulations proposed by SWARC will go to a state legislative administrative rules committee, which must review and approve the regulations and submit them for public comment.
“There’s plenty of heavy lifting ahead,” said Brandt. “We know we’re looking for quality teams to take on sports wagering in our state and we hope we’ve laid the groundwork here.”
New Mobile Sports Betting Licensing Criteria Proposed
Race- and gender-based licensing criteria removed from the proposed regulations approved by SWARC today were replaced with criteria suited to small, entrepreneurial businesses eager to enter the sports betting world. That seems to leave many minority- and women-owned businesses in the fold.
According to Brandt, the following are among the new criteria:
- Each applicant must include at least one individual entrepreneur, and;
- Each mobile sports betting license applicant and each new Class B (additional retail) facility license applicant must demonstrate at least 5% direct and industry ownership by individuals with a maximum personal net worth of $1.8 million – the same amount required by federal regulations and used by Maryland state agencies to determine disadvantaged business enterprise qualifications.
“The ($1.8 million) amount may sound high, but it is commensurate with the complex sports wagering compliance requirements that come with managing large amounts of cash,” Brandt told the commission.
Brandt said the proposed changes are designed to move along a regulatory and licensing process that requires SWARC to “actively seek to achieve racial, ethnic, and gender diversity among licensees” as permitted by law.
“Over the past year, we’ve received extensive legal advice on ‘constraints upon us in managing a licensing process,’” he said.
The proposed changes to licensing criteria appear to be a response to calls for SWARC to speed up its work. Gov. Larry Hogan publicly called out SWARC in a June 14 letter in which he urged the commission to help push mobile live in Maryland by the 2022 NFL season kickoff on Sept. 8.
NFL Kickoff Launch of Maryland Mobile Sports Betting Still Unlikely
SWARC hopes to have a decision from the state legislative administrative rules committee by the next scheduled SWARC meeting on Aug. 17. That will start the clock on a public comment period (which is typically 30 days), and move the emergency rules toward final approval.
That said, a mobile launch by NFL kickoff on Sept. 8 looks unlikely.
SWARC is still waiting on the required industry analysis, said Brandt, “to determine if there is a legal basis to implement race- and gender-conscious measures in the application and evaluation process.”
Right now, Brandt said, that analysis is still waiting for review by entities, including the Maryland Attorney General’s Office.
“When that process is completed, there may be changes to the regulations and applications given initial approval today by SWARC,” he said. “Once the emergency SWARC regulations become effective and the industry analysis is completed, SWARC can set a date when the formal applications and fees may be submitted. Then we’ll be in a position to set a timeline for additional actions.”
Applications Move Forward
Also approved by SWARC today were the mobile and additional retail sports betting application forms. The application process can begin once the emergency regulations receive final approval and the industry analysis is complete, hopefully by late summer.”
Up to 60 mobile licenses and up to 30 retail licenses that are not among the 17 designated by statute are possible under the law.