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Lawmakers struggle to craft equity rules for Md. sports betting law

FILE: This Sept. 9, 2018 file photo shows football fans waiting for kickoff in the sports betting lounge at the Ocean Casino Resort in Atlantic City, N.J. A report released Feb. 2, 2021 by the American Gaming Association predicts fewer Americans will bet on this year's Super Bowl, a decrease driven largely by fewer people back at work in offices where betting pools are circulated. But the report also predicts a record amount will be wagered online this year. (AP Photo/Wayne Parry, FILE)

Football fans wait for the opening kickoff of a game in the sports betting lounge at the Ocean Casino Resort in Atlantic City, New Jersey, in 2018. Maryland has fallen behind neighboring states in allowing sports betting, but efforts to put together a proposal in the General Assembly have collapsed in recent years. (AP File Photo/Wayne Parry)

Minority-owned businesses interested in sports betting licenses in Maryland say a House proposal doesn’t go far enough to ensure equal participation and wealth-building opportunities.

State lawmakers hope to finalize a legal framework that would allow the Maryland Lottery and Gaming Commission to begin issuing licenses perhaps as soon as this year. In doing so, leaders, including House Speaker Adrienne Jones, say they want to learn from the lessons of issuing lucrative medical cannabis licenses and ensure Black business owners have an opportunity to participate in owning licenses and building generational wealth.

“Brick-and-mortar licensing is not for us a game-changing or a generational-appropriate opportunity for wealth building,” said Troy Jones, an equity owner in the River Boat on the Potomac, a minority-owned off-track betting site in Charles County that plans to seek a mobile license.

Jones and his partners said they worry that few will be available after casinos and race track venues are awarded licenses.

“Then you’d have the minority firms fighting amongst one another for a very small piece of the pie, and that’s not what I think the state wants to have happen with regard to the gaming and sports betting industry,” said Jones, who called for the state to increase the number of available mobile licenses to 20.

The General Assembly will once again attempt to finalize a legislation that will create sports betting licenses after nearly seven in 10 voters in 2020 approved changes to the state constitution to allow the activity. The House and Senate, which have been dealing with this issue since 2018, found themselves at an impasse last year on how to distribute licenses, and in a pandemic-shortened session opted to pass simple enabling legislation that required voter approval.

“There’s no doubt that we have made past mistakes in how we support out (minority businesses) in this state, and I’m glad we didn’t simply pass the Senate bill last year that didn’t accommodate this and we took the time to look at this,” said Del Anne Kaiser, D-Montgomery and chairwoman of the House Ways and Means Committee.

The bill sponsored by Jones, the top Democrat in the House, calls for the creation of tiered licenses for brick-and-mortar facilities such as casinos, race tracks and off-track betting facilities. Another 10 licenses for mobile sports betting would also be available on a competitively bid basis.

“It maximizes the opportunity for minority-owned businesses to be meaningful participants, both in equity ownership and in procurement contracts,” said Jones.

Jones noted that disparity studies conducted by the Maryland Department of Transportation on both the medical cannabis and gaming industry have found historical inequities for minority-owned businesses.

Jones, the first woman and first Black presiding officer in the Maryland General Assembly, has made equity issues a key component of what she has called a “Black agenda” for the 2021 session.

The Senate Budget and Taxation Committee has established a work group that has met each of the last two weeks in advance of working on its version of the bill.

“In crafting this bill, the speaker set a very clear agenda, and we want to create the opportunity for minority business owners, Black business owners, to own equity in these licenses in a way this state has rarely, if ever, provided in the gaming industry” said Del. Eric Luedtke, D-Montgomery and House Majority leader.

Mobile licenses are expected to be highly sought after as younger people gravitate toward online venues and as casinos and other venues have seen declines in visitors. In Virginia, there were more than two dozen applications for just 12 mobile licenses. In Pennsylvania, more than 94% of all sports betting in the state in recent months has been conducted online and not in a physical venue.

Jones and the Legislative Black Caucus, which comprises nearly half of all Democrats in the legislature, are pushing for more opportunities for Black business owners to build generational wealth by owning licenses in lucrative markets such as sports betting and medical cannabis.

“Black caucus members still remember minority businesses being completely shut out a few years ago when the state awarded 15 initial licenses in the medical cannabis industry,” said Del. Darryl Barnes, D-Prince George’s and chairman of the Legislative Black Caucus. “Given this, it is our responsibility to ensure that we learn from those mistakes and make a commitment to award some percentage of sports betting licenses to minority owners the first time around.”

In the past, the state has attempted to provide those opportunities through traditional minority business participation rules, which attempt to require industries to contract with minority-owned businesses.

“These efforts have reduced, not eliminated the effects of discrimination in public procurement,” said Barnes. “We have a grand opportunity, with the implementation of sports betting to ensure we craft a model that promotes fairness, diversity and inclusion within this industry.”

In recent years, lawmakers have seen efforts to bring minorities into industries such as medical cannabis falter as they attempted to create standards in which applications were scored and received bumps for having minority equity ownership. Specific set-asides for groups are much harder and face higher levels of legal scrutiny.

“My only concern is whatever we do, I want to make sure that it is not susceptible to a plethora of lawsuits that may or may not be successful so that we can get up and running quickly,” said Del. Jason Buckel, R-Allegany and a member of the Ways and Means Committee. We’re already years behind some of our regional competitors.”

Luedtke noted that casinos, race tracks and bingo parlors “are historically almost all white-owned” in Maryland. Luedtke said the bill will abide by legal standard but set the state up as a national leader in minority inclusion.

“What we’re doing with this bill will change the gaming industry in America,” he said.

 


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