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Concerns of minority advocates collide with casinos’ push for swift license OK

“The one thing I don’t want to see happen is these three large casinos getting 10 steps ahead before anyone else that’s trying to go for a license,” said Del. Darryl Barnes, D-Prince George’s and chairman of the Legislative Black Caucus. (AP File Photo/Julio Cortez)

A potential vote on three sports wagering licenses has some worried that prospective minority owners will be left out.

The Sports Wagering Application Review Commission as early as Thursday could approve the applications for three casinos — Horseshoe in Baltimore, Maryland Live in Hanover and MGM National Harbor. All have passed initial reviews and background checks by the Maryland Lottery and Gaming Control Agency. A vote by the commission, commonly referred to as SWARC, could put those casinos on track to take sports bets by the end of the year.

Some applicants, lawmakers and even members of the review panel worry that issuing licenses now could hurt minority-owned applicants, including some that are guaranteed a license in state law. 

“The one thing I don’t want to see happen is these three large casinos getting 10 steps ahead before anyone else that’s trying to go for a license,” said Del. Darryl Barnes, D-Prince George’s and chairman of the Legislative Black Caucus. “That is not legislative intent. The intent is to get more minorities participating in yet another multimillion-dollar industry coming to the state of Maryland and giving them a fair shot as far as creating generational wealth for their companies.” 

 Up for grabs are as many as 100 licenses, including up to 60 mobile licenses considered to be the most lucrative of all.

John Martin, director of the Maryland Lottery and Gaming Control Agency, said the bill passed this spring “is the most comprehensive sports wagering law in the nation.” 

 That law guarantees 17 licenses to 18 brick and mortar locations.

As we interpreted the legislation, it looked pretty clear that the first group were being essentially moved through the process because they needed to set up the subsequent activities,” said Martin. 

Those activities include a fund meant to help minority- and women-owned businesses get into the industry. That fund is paid for with a percentage of the applications from the first group of licensees.  

“If you read the legislation you say, ‘how else do we fund this assistance fund unless we have applicants who precede them?'” said Martin. 

The law also includes what Martin called “an alternative licensing provision,” which allows his agency to vet and approve those applicants that already hold gaming licenses in Maryland or some other states. Included on that list are Maryland’s six casinos. 

Martin said officials also can expedite licenses holders “in other states that closely model” Maryland’s gaming license law. As many as 15 states meet that definition including New Jersey and Nevada, said Martin.

Six licenses are set aside by law for the casinos. Pimlico and Laurel race tracks would share one. Another is designated for the State Fairgrounds in Timonium. 

The stadiums used by the Orioles, Ravens and the Washington NFL team also have licenses set aside. 

Four off-track betting sites have also been designated for licenses: Greenmount Station in Carroll County; Jockey Bar and Grille in Washington County; Long Shots in Frederick County; and Riverboat on the Potomac. 

Two others are set aside for Bingo World in Anne Arundel County and Rod and Reel in Calvert County. Both are the only two bingo halls in the state with at least 200 electronic bingo machines. 

Gerry Evans, a lobbyist representing Bingo World, said issuing the licenses to the three casinos represents an unfair advantage. The first operations to be licensed will likely benefit the most, he said. 

“It’s like starting a race, but giving the casinos a lap before we even get the starting gun,” said Evans. 

“These casinos have made billions of dollars — net billions,” said Evans. “There’s not much money in sports betting to begin with. So do they have to have every nickel and every dollar in Maryland? Really?” 

One thing regulators could do to even the field would be to issue all of the mobile licenses at the same time, said Evans. 

Up to 30 more licenses will be competitively bid as will the mobile licenses. Mobile licenses in other states have accounted for as much as 80% of the wagering. 

None of those applications can even be taken before the state completes a second disparity study. 

Martin said the new study will update one done over a year ago based on a Senate bill that did not pass. Completion of that study, the application and review process would likely mean that no competitively bid license would be issued before next summer or fall.  

Meanwhile, the lottery and gaming agency has vetted three casinos and sent them to the commission, which could award licenses this week. 

 Those casinos are already preparing physical locations to take bets. Pending the issuance of a license and a final inspection by the state gaming regulators, the first bets could be taken by the end of the year. 

Sen. Craig Zucker, D-Montgomery and sponsor of the Senate version of the bill that passed this year, called for patience as the independent review panel does its job. 

“I think we as a legislature have done our job, and now we need to let SWARC do theirs,” he said. 

Barnes said a new disparity study should mean no licenses are awarded. 

 “I think once again we’re being put at a disadvantage,” Barnes said, speaking about minority- and women-owned applicants. 

Frank Turner, a former state delegate who is now a member of the application review commission, said it’s too soon to begin awarding licenses. 

“You can put anything on the agenda you want,” he said. “That doesn’t mean it’s going to be approved. I would like to think in order to keep in line with the purpose of the commission, (a vote) might be premature.”  

Turner said the panel must maximize opportunities for small minority-owned and women owned businesses. “That’s one of the directives of the commission,” said Turner. “At this point, I don’t think we’ve done that yet.”