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Md. sports betting debate focuses on number of licenses

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 kickoff in the sports betting lounge at the Ocean Casino Resort in Atlantic City, New Jersey, in 2018. Maryland lawmakers are debating how many brick-and-mortar and mobile sports betting licenses should be allowed in the state. (AP File Photo/Wayne Parry)

Groups interested in sports betting operations in the state are pressuring lawmakers to guarantee more licenses after seeing one peeled off for a track location in Southern Maryland.

Legislation sponsored by House Speaker Adrienne Jones and under consideration by the Senate Budget and Taxation Committee would create nearly three dozen sports betting licenses with an emphasis on ensuring minority ownership. That effort has led to the creation of a number of guaranteed licenses, one of which would go to a uniquely located off-track betting parlor known as the Riverboat on the Potomac.

“Riverboat is in a very different situation from all the other OTBs in the state,” said Del. Eric Luedtke, who along with Jones testified before the Senate Committee on the bill Thursday.

The Riverboat on the Potomac is physically connected to the Virginia side of the river, but most of the facility is over the waterway, which is legally controlled by Maryland. The business pays state taxes as well as holds a state of- track betting license.

“The bettors at the Riverboat would largely becoming from Virginia,” said Luedtke. “So, we saw that as fundamentally different from some of the other OTBs in terms of where it would draw its player base from.”

Alyse Cohen, sole owner of Long Shot’s, a Frederick off-track betting location, called on lawmakers to also set aside both a brick-and-mortar and mobile betting license for her business. The facility is one of four independent off-track betting sites along with the Riverboat location and is the only one in the state owned by a woman.

“There is no better way to even the playing field than to allow a business like Long Shot’s to enter into a primarily male-dominated industry,” said Cohen, adding that all four off-track sites should be included.

The bill sponsored by Jones, the first woman and Black person to lead a chamber of the Maryland General Assembly, calls for the creation of three licenses classes, including nine physical class A licenses, which would be guaranteed for the state’s six casinos, Laurel Park and the Maryland State Fairgrounds in Timonium as well as the Riverboat on the Potomac, an off-track betting parlor that is technically in Maryland but fronts Virginia.

There would be a special permit class guaranteed for Pimlico Race Course and the three major league stadiums for in-person sports betting on game and race days and other special events such as large concerts.

There would also be 10 Class B licenses for other brick-and-mortar facilities. Those licenses would be bid competitively and awarded by a new Sports Wagering Application Commission.

It’s the final class of licenses, 15 mobile licenses, that are the most sought after because they are the most lucrative. The licenses are not currently tied to any other class of license proposed in the legislation and would also be competitively bid.

Jones, who has prioritized a  focus on equity for Blacks and other minorities this session, wanted to ensure that minority businesses had an opportunity to create wealth through ownership, including the mobile licenses.

A number of bingo halls as well as off-track betting parlor in Frederick expressed interest in those licenses.

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.

A recent report from the American Gaming Association found that 80% of sports bets are placed online or via a smartphone application.

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.

Malik Edwards, co-owner of Maryland-based Bet on Black LLC, called on lawmakers to increase the number of mobile licenses to equal the total available to those going to physical locations.

“Given everyone’s stated goal of minority inclusion, it appears that the best option for minority equity is the pursuing of the mobile license,” said Edwards, adding that the small number of mobile licenses puts the state at risk “of not having any minority equity inclusion.”

Competition for the licenses, sometimes referred to in the industry as skins, is expected to be fierce.  Recently in Virginia, there were more than two dozen applications for just 12 mobile licenses.

Rob Garagiola, a lobbyist for Maryland Live, asked lawmakers to guarantee casinos not only a license for a physical location but also for a mobile license. He called for the number of available mobile licenses — called “skins” in industry parlance — to be set at 12, which is the number of mobile licenses now available in Pennsylvania.

“It is far easier to add more skins later if the Maryland market can withstand more skins than to have too many skins at the start with a diluted market, less revenue and potentially failing licensees,” he said.

 


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