A legislative committee hearing in Maryland Tuesday highlighted a proposed sports betting license for a nonprofit organization. This is the next step for lawmakers in determining which companies are eligible for sports betting.

Senator Chris West’s proposal would allow Maryland State Fairgrounds to open a retail and online sports betting facility. If approved, Maryland State Fair officials would use all proceeds from sports betting for charity, West said during a hearing on the bill Tuesday. The Baltimore County Fairgrounds are 15 miles north of downtown Baltimore and 20 miles south of the Pennsylvania border.

West told the Senate Budget and Tax Committee that the exhibition grounds already operate the state’s most lucrative off-track betting location and that the same facility will house a sports betting facility for retailers. It would be the only retail betting location in Baltimore County on his proposal.

“If there’s a determination to distribute the sports game licenses across the state, it’s important to make sure Baltimore County isn’t left out,” West said.

The bill would make Maryland the first of around two dozen states to have legal sports betting that requires a license for a nonprofit organization. Their adoption depends on separate legislation regulating sports betting in the state.

West’s bill is the first Senate proposal presented in this legislative term that deals with the critical framework for issuing sports betting licenses. A broader bill will be introduced shortly, but West’s early efforts help outline another potential stakeholder in the crucial negotiations for eligible licensees.

Eligible operators of Maryland sports betting are still undetermined

Maryland voters overwhelmingly voted in favor of legal sports betting in a referendum in 2020. However, important issues such as tax rates and license holders must be approved by lawmakers before betting can begin.

The COVID-19 pandemic has curtailed legislative efforts for 2020, including a broader law that would have answered many of those key questions that General Assembly supporters hoped to approve in the context of the referendum. Elected officials working on the 2020 bill largely supported online and retail licenses for the state’s six commercial casinos, and it seems almost certain that the 2021 follow-up bill will do the same.

Most casino license holders seem to have already discontinued their partner sports betting operator. MGM, Penn National and Churchill Downs already own casinos in Maryland, while parent companies for Live! Casino and Hotel, Rock Gap Casino Resort and Horseshoe Casino Baltimore already have sports betting offers for their properties in other states.

Once approved, Maryland would likely have the following sports betting. Caesars in particular owns the Horseshoe Casino as well as the William Hill brand, so Rocky Gap’s parent company Golden Entertainment could be forced to find a separate partner.

  • MGM National Harbor: BetMGM
  • Horseshoe Casino Baltimore: Caesars
  • Hollywood Casino Perryville: Bar stool sports betting
  • Life! Casino & Hotel: FanDuel
  • Ocean Downs: TwinSpires
  • Rocky Gap Casino Resort: William Hill

In addition to the six casinos, some lawmakers had sponsored at least one online license for the Stronach Group, which owns the legendary Laurel Park and Pimlico racetracks. The Stronach Group has pushed for sports betting to open at its California and Florida facilities, but neither state has legalized sports betting.

The law that introduced the election measure for 2020 also required the state to assess minority stakeholders’ participation in the emerging sports betting market. While it has not been established how to do this, it could also open the door to owning sports betting outside of the state’s traditional gambling companies. Hypothetically, this could mean that sports betting licensees are approved for certain bars or restaurants.

Maryland sports betting future

How these competing factions are licensed determines the start – and likely success – of sports betting in Maryland.

Maryland is a national leader in terms of income per capita and level of education. Demographic trends that positively correlate with participation in sports betting. Just about every major operator will try to enter the market, but the allocation of online licenses, which make up the lion’s share of operators’ revenues, could pull some top sports betting out of the Old Line State.

If the legislature allowed one online license apiece for the six casinos, the racecourse operator and the exhibition center, it would only mean eight legal sports bets. This would follow the sports betting offerings in neighboring Virginia and Pennsylvania, which are competing with Maryland for gambling money.

Licensing bars and restaurants could expand gaming options, but the larger gaming interests would surely counter any proposal that would allow them nationwide licensing of cell phones. With just retail options, they would account for a small fraction of the total market share.

West’s Fairgrounds’ bill also seems to rule out any other hypothetical sports betting business in Baltimore County, home to more than 800,000 residents, the third most popular of all Maryland Counties.

Guy Guzzone, chairman of the Senate Finance and Tax Committee, said a vote on the fairground bill could take place as early as Thursday. In the meantime, that legislation – and the future of Maryland’s sports betting industry – depends on the far more rigorous proposal that dictates how officials would approve, tax, and regulate the sports betting industry.