Mobile sports betting in Md. moves forward as race, gender criteria axed for now

Maryland’s move toward mobile sports betting took another step Wednesday, but the process will not initially consider race and gender.

The Sports Wagering and Application Review Commission approved emergency regulations governing the awarding of 60 mobile licenses. Thomas Brandt, chair of the panel, said the decision allows prospective applicants for licenses for physical locations and the more lucrative mobile licenses to prepare for the application process.

“Once the emergency SWARC regulations become effective, and the industry analysis is completed, SWARC can set a date for when formal applications and fees can be submitted,” Brandt said. “Then we’ll be in a position to set a timeline for additional actions.”

In all, about 100 licenses are available. Sixteen were guaranteed to go to 17 locations including the state’s six casinos, the Laurel and Pimlico racetracks, and the Maryland State Fairgrounds, as well as some off-track betting sites, licensed bingo parlors and for the stadiums where the Orioles, Ravens and Commanders play.

Smaller operators — bars and restaurants — will also be able to apply for 30 licenses for physical locations.

Sixty licenses are potentially available for mobile betting, though some believe that number will never be fully realized.

On average, 95% of all sports wagers in the state will likely move online within four months of mobile wagering, according to reports by consultants for the state.

Most agree that the market will ultimately be dominated by large gaming operations such as the casinos and newcomers such as FanDuel and Draft Kings.

The commission has been facing heightened pressure to issue mobile licenses as it continues to wrestle with ensuring racial, ethnic and gender diversity in an industry that is new to the state. Black lawmakers, including House Speaker Adrienne Jones, have sought to not repeat the stumbles and lack of inclusion of the state’s once-fledgling medical marijuana industry.

“Over the past year we’ve heard extensive legal advice regarding constraints on us in so managing the licensing process,” Brandt said. “To avoid further delays we have asked staff and our professional team to draft regulations which exclude race and gender based license criteria.”

The commission faces public pressure — what Brandt called a “gotcha moment” — from some including Gov. Larry Hogan. The Republican executive demanded that mobile wagering, which is preferred by many who bet on sports, by the start of the NFL season in early September.

It is not clear, based on Brandt’s comments, if the commission can meet Hogan’s date.

In November, the commission awarded its first licenses over the initial objection of some Black members of the panel, including former Del. Frank Turner.

Turner at the time wanted a delay to allow for minorities and women to be able to apply for licenses at the same time.

“We don’t seem to start at the same starting point that everyone else does,” Turner said then. “Then we get left behind, just like we did with the cannabis. We got left behind.”

Turner did not attend Wednesday’s meeting. Reached by phone, the former lawmaker said the regulations meet legal requirements.

“It’s not exactly the way I would like it, but I think it meets the minimum requirements,” said Turner, calling the licensing process “fluid.”

The commission is limited in what it can do to ensure diversity in ownership without an analysis of the industry. That analysis is ongoing and has effectively delayed issuing licenses except to the state’s casinos and a handful of other businesses with gaming licenses.

In an effort to attract some diversity, the new regulations and applications require prospective licensees to have at least one direct or indirect owner with at least a 5% stake to have a net worth of not more than $1.8 million.

Part of the fluidity relies on the outcome of the study by the consultants and the Office of the Attorney General. Application requirements for owners with less than $1.8 million in net worth could also factor into whether other mitigation efforts are warranted.

Even then, Turner said there may be “no guarantees” of attracting minority majority owners. Another barrier, he said, are the associated costs including cash reserves, licensing and other fees.

“It’s a very cash-demanding industry,” he said. “That’s a lot of money in reserve, to have a half million dollars in reserve and there’s just no guarantee.

“The only thing we can do is our due diligence and put forward our best effort to find someone or some company or some individual that was interested in pursuing an opportunity in this field.”