A new Senate bill in Maryland aims to legalize 4,000 historical horse racing (HHR) machines in an effort to help struggling off-track betting (OTB) retail locations. If approved, the HHR bill would allow the OTBs to operate the gambling devices to operate under Maryland’s sports wagering laws. They would be placed inside OTBs and racetracks that have sports betting licenses.
HHR machines look similar to slots visually, but they operate differently. Slot machines have fixed odds and use a random number generator to ensure random results. Meanwhile, HHRs use statistical data from past horse races, mimicking pari-mutuel betting at race tracks.
Bill faces opposition from casinos, horse racing organizations
Proponents and opponents talked about HHRs during a March 5 hearing in the Senate’s Budget and Taxation Committee. SB 982 lead sponsor Sen. Paul Corderman and OTB owners, discussed HHRs as potential saviors for the industry, which is facing declining revenue. They argued that the machines would inside local businesses. That would keep betting dollars inside the state instead of neighboring states.
However, opponents from the casino industry argued that HHRs would cannibalize slot revenue. They argued that the machines are essentially slots, which are subject to higher taxes. SB 892 calls for a 15% tax, the same as sportsbooks. Meanwhile, the taxes for slots and video lottery terminals are between 42% and 58%. Opponents claim this discrepancy would create an unfair advantage for HHR operators while potentially diverting revenue from traditional casinos.
Additionally, some in the horse racing industry itself oppose the measure. Alan Foreman, chairman and CEO of the Thoroughbred Horsemen’s Association, told Blood-Horse magazine that the racing industry does not promote the proposal or benefit from it.
If legalized, HHRs would hinder iGaming chances
Expert consensus seems to be that SB 982 faces an uphill battle due to opposition from the state’s retail casinos. However, if it were to succeed, that could be bad news for the chances of legalizing online casinos in Maryland. Introducing HHRs would likely deepen the casino industry’s resistance to iGaming due to concerns over market cannibalization.
These concerns were one of the primary reasons last year’s iGaming effort failed, even though many proponents gave the state a good chance of passing it. Some casino operators in Maryland, including Cordish Companies and Churchill Downs Inc., have established themselves as strong opponents of iGaming. They will likely continue to do so, especially if HHRs are introduced. Also, while casino workers’ labor unions might welcome the introduction of HHR for the potential job creation, they will likely oppose future iGaming proposals over fears of job losses.
Despite these challenges, iGaming advocates remain committed. Delegate Vanessa Atterbeary, who led last year’s initiative, introduced a new proposal in this year’s legislative session. While it has yet to gain significant traction, the proposal would require voter approval via a 2026 referendum if passed by the Maryland General Assembly.
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