A November online casino referendum in Maryland is looking more likely than ever, as the state’s iGaming legislation has now completed hearings in both halves of the legislature. On Feb. 26 and 28, Maryland lawmakers accomplished something that has proven impossible in any other state this year — finding traction for online casino and poker bills in both the House and Senate.
However, the state’s constitution remains an additional hurdle. State Sen. Ron L. Watson, the primary advocate of legal iGaming in Maryland, said on Feb. 28 that even if lawmakers approve all of the necessary bills — HB1319, SB565, and SB603 — the most critical vote will be the one in November. That’s when Marylanders could see a ballot measure asking them to change the state constitution and legalize online casino and poker gambling.
Watson, D-Prince George’s County, spoke on Feb. 28 before the Senate Budget and Taxation Committee hearing on his bills:
It must go to the voters.
At the Feb. 26 hearing on her bill, HB1319, Del. Vanessa E. Atterbeary also emphasized that passage of the bills will mean “the people” decide on allowing online gambling, the same way they chose to legalize cannabis in November 2022.
So, Marylanders are familiar with the ballot process to change the law, noted Atterbeary, D-Howard County.
Watson said these bills to legalize iGaming are the only revenue-generating measures proposed. So, if lawmakers don’t pass them and let the voters decide, education funding will decrease. The most urgent funding problem will happen in Fiscal Year 2027, when there won’t be enough money to pay for the Pre-K programs outlined in the Blueprint for Maryland’s Future (BMF), according to the bills’ fiscal note.
Watson said if iGaming becomes law, BMF will have $250 million to $300 million from taxes paid by online gambling operators exactly when other education funding stops.
Watson Expects iGaming to Add Jobs, Revenue
Atterbeary, Watson, most Maryland casino operators, interested online gambling operators, and industry organizations, including iDEA Growth (iDevelopment and Economic Association), agreed that legalizing online casino and poker gambling would result in job and revenue growth.
They said studies and regulator reports from legal iGaming states show that iGaming benefits retail casinos on both fronts.
Watson’s Maryland iGaming bill, SB603, calls for a 47% tax rate on online gambling operators. Atterbeary’s is higher, at 55%, with an additional 20% tax on online casino live dealer games.
The fiscal notes for the bills show those taxes would come out of an expected $6 million in revenue during Fiscal Year 2025, $539.4 million in Fiscal Year 2026, and $904.9 million in Fiscal Year 2029 when the market reaches maturity.
The final revenue figure exceeds the $900 million expected in an iGaming feasibility study commissioned by the state’s regulator, the Maryland Lottery and Gaming Control Commission (MLGCC).
Live dealer studios may fund more
However, Watson said operators interested in launching online casino and poker skins in Maryland want to invest more than tax dollars and the $1 million license fee.
For instance, one quoted him a figure as high as $5 million to construct a live dealer and production studio.
One such proposal came from Urban One CEO Alfred C. Liggins III. The leader of the Baltimore-based media company testified that he’d like to build a production and live dealer studio in Maryland if he can buy an iGaming operator license. The studio could then house live dealers from an Urban One-branded site and other licensed operators partnering with the media company for the services.
Meanwhile, Watson said, the live dealer studios that are required to be inside Maryland to serve Marylanders tend to employ 700 to 1,000 union workers for everyday operations. That’s after union workers built the “multi-million-dollar facilities.”
Watson said:
It literally is a soundstage, and this is where jobs can be created.
Watson’s chief of staff, Clate D. Jackson, played a video demonstrating what live dealers do during the Feb. 28 hearing. It also displayed a live dealer studio, which Bonus recognized as belonging to Evolution (Evolution AB (publ) 3,43 +2,08%).
Howard Glaser, the global head of government affairs and legislative counsel at Light and Wonder (Light & Wonder Inc 93,39 +4,39%), noted during his Feb. 26 testimony in favor of Atterbeary’s bill that his company also offers live dealer services to online casinos.
Bonus has also reported on Playtech (Playtech PLC 746,00 +1,08%) and Stakelogic studios in other states.
Testimony From 89 Speakers Was Pro, Con
Much like Atterbeary’s five-hour-long hearing, Watson’s meeting was lengthy.
At the beginning of the Senate committee hearing on Watson’s bills, Chairman Guy Guzzone said 33 individuals signed up to speak about the referendum measure, SB565. Also, 56 requested to testify about SB603.
Guzzone, D-Howard County, asked the speakers who wanted to discuss both bills to consolidate their time.
Addressing the referendum bill, Watson asked his colleagues to approve SB565. Because SB603 was the measure that would most likely see amendments.
Sentiments in the SB603 testimony were also nearly identical to those voiced about HB1319. Speakers in favor of the measure touted job and revenue growth. They also claimed there would be no “cannibalization” of commercial casino revenue from iGaming.
Those opposed — predominantly casino workers and their union representatives — said there would be job and revenue loss that could be directly blamed on iGaming legalization.
Watson emphasized that without legal online casino and poker revenue, casinos opening this year in Virginia will be the primary drivers of casino jobs and revenue loss in Maryland.
Watson said MGM National Harbor alone may lose as much as 30% of its revenue once a casino opens in Northern Virginia.
Senator Asks About Social Games
Legislators’ questions revolved around how the apps would prevent underage gambling, which operators pointed out would work the same way online sportsbooks already do in Maryland. Mobile sports betting launched in Maryland in November 2022, allowing those 21 and older to wager.
Yet state Sen. Jack Bailey, R-Calvert and St. Mary’s counties, asked casino owners and operators if minors would be able to gamble on online casino games because his 10-year-old son was able to use “coins” on an unregulated social game to bet on the Super Bowl. They assured him that legal sites wouldn’t allow that to happen.
Maryland iGaming to Aid Problem Gambling Fund
The bills show that Maryland online casino operators would send 1% of revenue to the Problem Gambling Fund. The fiscal note calculates that it will total $9 million annually.
Watson said the funding is included in the bills, which wasn’t true of sports betting.
That’s why the committee heard about SB878, which would add 1% of revenue from lottery, daily fantasy sports (DFS), and sports betting to the fund. Those testifying about that bill estimated the retroactive measure would generate $8 million annually.
Kenneth Wolfson, “the first-ever Maryland Certified Gambling Peer Recovery Support Specialist” with the Maryland Center of Excellence on Problem Gambling (the Center), testified:
Simply put, gambling gave me my wings, then took away my sky.
Wolfson opposed SB603.
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