Md. Black lawmakers say sports betting must include minority equity

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The leader of one of the largest blocs of votes in the Maryland General Assembly said Black lawmakers in Annapolis may not support efforts to create sports betting in the state if it does not include the ability for minority ownership.

More than six in 10 voters earlier this month approved a change to the Maryland Constitution that would allow the creation of a sports betting industry in the state. The bill that authorized the required referendum did not determine how many venues within the state could take those wagers or a process for awarding licenses.

Del. Darryl Barnes, D-Prince George’s and chairman of the Legislative Black Caucus, said it’s important that the General Assembly learn the lessons of the medical cannabis industry and ensure minority participation, including true ownership.

“I think we will use the lessons learned from the medical cannabis industry to make sure that we’re moving methodically with the sports betting,” said Barnes. “It is the intent, once again, to ensure that when we talk about equity and inclusion and diversity that’s what we mean. We want to ensure true ownership for minorities that are applying, that they are not used in no way to dilute their ownership, and we’re moving as quickly as we can to try to put together language that makes sense.”

Efforts to expand the number of medical marijuana licenses, including an intent to provide some licenses to minority owners, has stalled amid concerns about the application process and potential litigation.

“As the chairman of the Legislative Black Caucus, I will not support a bill that does not have some form of equity and inclusion,” said Barnes. “So, if there’s no bill that speaks to that, that makes it fair for minorities to participate, then I will not support that.”

Asked if his caucus, which makes up nearly half of all Democratic votes in the House of Delegates, would vote similarly, Barnes replied: “I believe that the members of the Legislative Black Caucus want to ensure that there is some form of equity and inclusion.”

A recent study on racial disparities commissioned by the legislature found little had changed since a 2017 study was conducted as the state considered racial inequities in the medical cannabis program.

“I would note, however, that even where a strong basis in evidence exists to support a race- or gender-based program, that fact alone should not end the inquiry,” wrote Jon  Wainwright, an economist and consultant who conducted the 2017 review as well as the 2020 review for gaming licenses. “Specifically, it is imperative that any race- or gender-conscious goals or other mechanisms applied to the gaming industry be carefully established and implemented in a manner consistent with the law.”

Exactly how that would be done is a looming question. An opinion from Attorney General Brian E. Frosh deemed that setting aside a medical cannabis license specifically for minority owners would likely be unconstitutional. Barnes and others believe that opinion would apply to gaming licenses.

Maryland, which has a complicated history with gambling and sports betting, is already behind its neighbors in Pennsylvania, Delaware, the District of Columbia and West Virginia.

Democrats, the majority party in both the House and Senate, have rarely seen eye-to-eye on gaming. Regarding sports betting, the chambers have frequently butted heads on how to implement such a program. Differences over who would get a license in 2018 — the Senate preferred casinos and the House wanted to make horse racing venues eligible — prevented the General Assembly from going to voters the same year the Supreme Court struck down a federal law that effectively banned sports books in every state but Nevada and Delaware.

In 2020, the General Assembly passed legislation in a pandemic-shortened session that put the issue before voters but did not fully establish the industry or a process for licensing.

To pass that bill, the House and Senate stripped the measure to its bare ballot question provisions and a minority disparity study.

“I think one of the things that was attempted last session, at least with the Senate bill, was to demonstrate that minority businesses are a priority,” said Sen. Craig Zucker, D-Montgomery. “This is going to be a transparent process where we’re going to have everybody at the virtual table and we’ll work this through. Based on what we know to be true, it’s very important that minority businesses are included and making sure that whatever we do in this process is inclusive and transparent.”

Wainwright did not review the stripped out provisions in Zucker’s bill that included minority business participation goals for construction and procurement as well as designating 1% of the proceeds to the state for a fund for minority- and women-owned businesses.

But other significant hurdles remain, including determining the number of licenses, who is eligible, licensing fees and taxes on the industry.  There is also no guarantee that debate over the bill doesn’t run the length of a session that is scheduled for 90 days but could be significantly affected by the coronavirus pandemic if not abbreviated, as it was earlier this year.

There is an emerging consensus among lawmakers and the gambling industry that licenses will be made available for the state’s existing casinos and racetracks as well as a mobile option.

“My hope is that we have the most modern technology in the bill so that we only have to do this once,” said Sen. Nancy King, D-Montgomery and a member of the General Assembly’s Joint Committee on Gaming Oversight.

The House and Senate continue to work on potential legislation though few specifics have emerged.

Del. Anne Kaiser, chair of the House Ways and Means Committee, declined to be interviewed on potential legislation.

“Ways and Means leaders are discussing an implementation bill,” said Kaiser, whose committee will hold hearings on any legislation that passes through the House. “We plan to have something introduced in January, but don’t have the details to share at this point.”

House Speaker Adrienne Jones, who is the first woman and Black to serve as a presiding officer in the General Assembly, was not available for comment.

Indeed, many of the key industry players are already preparing for sports betting in Maryland. A number have already partnered with entities such as William Hill sports betting, and FanDuel and Draft Kings, which are well-known in the fantasy sports industry.

“The aid Maryland receives through sports betting will depend entirely on how it is implemented,” said Jake Joyce, chief marketing officer for Live Casino & Hotel in Hanover. “The way to maximize new taxes for the Education Trust Fund is to have sports betting controlled by existing, licensed gaming entities in the state. These operators should be required to invest in facilities and systems that ensure it is done right and grows other important gaming taxes for the state.”

Joyce said Live has already partnered with FanDuel  to create a “a state-of-the-art sportsbook concept” at its Hanover facility.

Barnes said he favors a system similar to one in the District of Columbia when sports betting was legalized in 2018. The District has no casinos or horse racing venues. Instead, the D.C. City Council created licenses for private venues at Nationals Park and the Capital One Arena. It also created licenses for bars and restaurants as well as a mobile app.

But the program has been hobbled by legal challenges as well as a rollout that was affected by a pandemic and a lackluster mobile app.

“I believe there is no foregone conclusion that anyone will automatically receive a license,” said Barnes. “I know that the casinos definitely want a license and it was disheartening to see that Maryland Live has already built out a sports parlor with us not even going through the legislative process.”