Maryland Senator Watson Files iGaming Bill: What Comes Next?

Maryland Senator Watson Files iGaming Bill: What Comes Next?
Fact Checked by Pat McLoone

Maryland Sen. Ron Watson filed two bills this week about legalizing iGaming in the state.

On Thursday, the Bowie Democrat filed Senate Bill 565, which calls for a public referendum to allow Maryland online casinos to operate. On Friday, he submitted Senate Bill 603, which would take effect if voters approved the measure in November.

Messages to Watson’s office were not immediately returned. A hearing on both bills (legislation and referendum) has been scheduled for Feb. 28.

A copy of SB 603 was made available online Friday afternoon after it was read on the Senate floor for the first time. The bill calls for up to six internet gaming licenses to be issued and each licensee may partner with two operators. Licenses will run for five years at a cost of $1 million. In order to obtain a license, the company must have had at least 250 full-time equivalent workers in Maryland as of Dec. 31, 2023 and commit to maintaining that level. They also must agree to spend at least $5 million to construct a studio within the state where they will run live-dealer table games for their online operations.

The bill also allows operators to keep 53% of their revenue. During the first year of operations, licensed operators will be able to deduct free play and promotional bonuses redeemed by players. After that, operators can deduct 20% of those.

The Old Line State is considered by many in gaming as the industry’s best shot at seeing iGaming expand in 2024. Neighboring states Delaware, Pennsylvania and West Virginia already allow it and represent nearly half of the seven states where real-money online slots, table games and poker can be played. However, it faces some opposition as critics have raised concerns about the potential for revenue and job losses at brick-and-mortar casinos.

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Fighting Concerns About Impact

Watson filed similar legislation last year, which led to the Maryland Lottery and Gaming Control Agency commissioning an impact study conducted by The Innovation Group. That study found that iGaming operators in the state could generate more than $900 million in taxable operator revenue yearly by 2029. At the same time, brick-and-mortar operators would likely see a loss of about $200 million.

A subsequent study commissioned by the Anne Arundel County Chamber of Commerce raised concerns about iGaming’s impact on the state.

That report, authored by The Sage Policy Group, estimated the state would see a loss of more than 1,200 jobs and $65.6 million in wages — an average of nearly $54,000 per worker — due to online casinos, and many of those workers might have no more than a high school education, making it harder for them to find job opportunities with similar wages and benefits.

The Sage study also raised concerns about operators holding off on capital brick-and-mortar investments due to the presence of Maryland iGaming apps.

“Diminished capacity to expand operations and physical footprints translates into lost employment opportunities, including for the state’s construction industry, another sector associated with living wage opportunities for those having acquired a high school degree or less,” the report stated.

Anne Arundel County is a suburban community between Baltimore and Washington, D.C. It’s home to Live! Casino Maryland in Hanover, a Cordish Cos. property. Live! Casino is a chamber partner.

A message to the Cordish Cos. was not returned.

Proponents of iGaming have argued Maryland online casino apps would complement a company’s brick-and-mortar product and, in some ways, act as a marketing tool for gaming operators to grow their base and introduce new customers to their resorts and facilities.

Howard Glaser, the global head of government affairs for retail and online casino game developer Light & Wonder, has compared iGaming and brick-and-mortar casinos to the music industry. Just because someone might enjoy listening to Taylor Swift’s songs online doesn’t mean they won’t attend her concerts.

Terms apply for all bonuses. Must be 21+ to participate.  
Bonus Bets Expire in 7 Days. One New Customer Offer Only. Must be 21+ to participate & present in MD. In Partnership with MGM National Harbor. Gambling problem? Call 1-800-GAMBLER. Visit BetMGM.com for Terms & Conditions. US promotional offers not available in NY, NV, or Puerto Rico.

‘Apples To Oranges’

The Sage study also raised concerns that iGaming’s impact could be significantly higher, noting that brick-and-mortar sportsbooks saw their revenues decrease by 63% after online Maryland sports betting started.

Bryan Wyman, an executive vice president with The Innovation Group, refuted that assumption, calling it an “apples to oranges” comparison.

“We’ve seen iGaming launch in other states, and we haven’t seen anywhere near that kind of impact,” he told BetMaryland.com. “With sports betting, it’s totally understandable that an enormous portion of the consumer base would want to bet online… That’s because sports betting is really transactional. There’s no experiential gain by going to bet on sports at a window versus betting on your phone.”

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Author

Steve is an accomplished, award-winning reporter with more than 20 years of experience covering gaming, sports, politics and business. He has written for the Associated Press, Reuters, The Louisville Courier Journal, The Center Square and numerous other publications. Based in Louisville, Ky., Steve has covered the expansion of sports betting in the U.S. and other gaming matters.

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