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With less than a month left in the Maryland legislature’s 2024 session, the House of Delegates worked overtime on Saturday (March 16) to pass a bill that would place an initiative on the ballot later this year to legalize online casino gaming.
House Bill 1319 was passed by a vote of 92-43, clearing the three-fifths majority needed to pass a state constitutional amendment.
Lawmakers also rejected four proposed amendments before advancing the bill to the state's Senate prior to Monday’s crossover deadline for bills to advance out of their original chamber.
If the Senate passes HB 1319 before adjourning on April 8, the initiative to legalize iGaming will be decided by Maryland voters in November.
Aside from considering the five amendments offered, there was little debate on the measure by members of the House.
Delegate Vanessa Atterbeary, a Democrat who sponsored the legislation, did not not make any introductory or concluding remarks before the vote.
Atterbeary’s bill would make a total of 30 licenses available to the state's six land-based casinos and so-called Class B sports wagering facility licenses, including off-track betting outlets and charitable bingo halls. The state’s six brick-and-mortar casinos would be entitled to between one and three licenses, depending on the extent of their partnerships with a minority partner.
Revenue from live dealer casino games would be taxed at up to 20 percent, while all other iGaming offerings would be taxed at a maximum rate of 55 percent, with rates to be determined through the license application process.
Each five-year license would cost $1m, with a renewal fee equal to 1 percent of revenue for the preceding three years.
During Saturday's floor session, Republican Delegate Ryan Nawrocki’s proposed amendment to require iGaming deposits to be made in person was rejected by a vote of 35-95.
Nawrocki called his proposal a commonsense amendment that would create a friction point in the process, and a “mechanism to verify that the person that is doing the gaming is an adult and should be able to do gaming.”
Delegate Kathy Szeliga, a Republican, also introduced an amendment to have patrons prove their identity in person when creating an online gaming account. It was rejected by the same tally of 35-95.
The House also rejected a proposal from Delegate Nicholaus Kipke requiring two-factor authentication of accounts by 37-91, while an amendment by Delegate Brian Chisholm to limit maximum wagers to $5 and allow players to bet no more than a total of $100 over a 24-hour period was rejected by 34-93. Both Kipke and Chisholm are Republicans.
The House did approve by voice-vote an amendment introduced by Delegate Linda Foley, a Democrat, related to a labor peace agreements in the bill. It clarifies that the online casino licensee or live dealer studio must remain neutral in a union drive.
Next Stop Senate
While iGaming has secured enough support in the Maryland House, bills introduced this session in the Senate have yet to move forward.
Other than one hearing in the Senate Budget and Taxation Committee, bills introduced by Democratic Senator Ron Watson are expected to die after Monday’s crossover deadline.
Watson introduced Senate Bill 603 to regulate and tax iGaming and accompanying referendum bill Senate Bill 565 with different language than Atterbeary’s bill in the House.
At an industry forum on Friday, proponents of iGaming sought to persuade skeptics that online casino was a necessary step to align Maryland's gambling market with broader shifts in consumer behavior.
“If you were going to a land-based casino during COVID, it was closed,” Jeff Ifrah, a lawyer and founder of the iDEA Growth trade association, told attendees at an iGaming Town Hall hosted in Baltimore by the National Council of Legislators from Gaming States (NCLGS) and Morgan State University’s Center for Data Analytics and Sports Gaming Research.
Ifrah dismissed concerns from land-based casino operators that legalizing online gaming will lead to job losses and patrons deciding not to go to their properties. He cited a recent study conducted for iDEA that showed there was not any cannibalization of land-based casino revenues in states that currently offer both online and land-based gaming.
“Some people prefer to go to Maryland Live!; Maryland Live! and other casinos will always have their customers,” Ifrah said.
“It is a different way to approach a new consumer,” Ifrah said about iGaming. “It is not an existing consumer who is going to chose this instead of that. It’s someone new and that provides a new opportunity.”
Joining Ifrah for the discussion on the potential implications of iGaming expansion in Maryland, was Scott Gunn, senior vice president of corporate public affairs for IGT; Robert Ruben, partner with Duane Morris; and Ryan Eller, executive vice president and general manager of Maryland Live! casino near Baltimore.
“Cannibalization is certainly a concern for our brick-and-mortar casino operators,” Eller said. “Certainly for me. I do expect that you will see double digit declines and cannibalization of revenue.”
Eller cited a separate study conducted for the Maryland Lottery & Gaming Control Agency that projected a 10.2 percent decline in land-based revenues resulting from legal iGaming, as well as a 4 to 8 percent reduction in labor, threatening the $1bn reinvestment companies have made in the state’s six brick-and-mortar casinos.
“It is going to be become quite hard to justify the continued level of investment that we have been fortunate to see in Maryland,” Eller said. “It is certainly my fear that Maryland Live! would go the way of the local strip mall.”
Eller said sports betting was good example of the concerns he has over legalizing iGaming in Maryland.
“I wouldn’t have seen 70 percent of my visitation go away from the casino as soon as sports betting went online,” Eller said, referring to the launch of mobile sports betting roughly one year after an initial rollout of retail sportsbooks at casinos in Maryland. “And I did. I had a big, beautiful sportsbook that was crowded all the time, and I don’t anymore. So that is part of the concerns we have.”
“I think it’s a valid concern,” he added.
