The Maryland Lottery and Gaming Commission (MLGC) will conduct an online casino impact study. It will determine the state’s potential outcome of legalizing online casino gaming. The results must be submitted by Nov. 15 to the Maryland General Assembly.
The study will focus on the estimated market size, economic results, and effect on problem gambling.
Suppose the study finds that online casino gaming would benefit the state. In that case, proponents like state Sen. Ronald L. Watson, D-Prince George’s County, will most likely introduce legislation to legalize it in the 2024 legislative session. Watson was the co-sponsor of this year’s failed bill to legalize online casinos in the state.
However, a future 2024 bill would have to race against time. Maryland is one of the states where gambling is prohibited in the state constitution, and any changes need to be approved by voters. The next such opportunity is in the 2024 presidential elections.
What Is the State Trying to Learn?
While commissioned to do the online casino impact study, MLGC will have a third-party company conduct the study. The agency announced that it had requested proposals from research companies.
Once MLGC selects a research company, the focus of the study will be:
- Estimated online casino market size
- Potential impact on the state’s lottery
- Potential impact on the state’s six retail casinos
- Online casino potential impact on problem gambling
- Study on other states with legal online casinos
If the results are positive, Watson and this year’s bill co-sponsor – state Sen. Nancy J. King, D-Montgomery County – will most likely introduce a new proposal to legalize online casinos in Maryland in the 2024 legislative session. The session starts on Jan. 10, 2024.
2023 Bill Fell Short, but Could Be Used in 2024
On Jan. 25, 2023, state Sens. Watson and King introduced the Internet Gaming Authorization and Implementation Act, or SB267. Unfortunately, the bill failed to make the Maryland legislative crossover in March. However, it generated enough attention for lawmakers to include the MLGC online casino impact study in the 2024 budget.
The favorable study results could help a future bill. Both Watson and King are Democrats, and the party controls both halves of Maryland’s legislature. While the 2023 bill failed, the study could convince more lawmakers to vote on it. It’s also likely that some provisions of SB267 could make their way into next year’s legislation.
Some highlights of SB267 that we could see next year include:
- The MLGC will oversee online gaming
- The six retail casinos will receive licenses which they can subcontract to online operators
- Tax rate of 15%
- A license fee of $500,000
- A renewal fee after every five years. The fee would be 1% of the operators’ after-tax revenue in the preceding three years
- Tax revenue would go into the Lottery Fund. Renewal fees would go into the Education Trust Fund
In addition, the 2023 bill included a requirement for operators to have a flexible self-exclusion form. That means players can exclude themselves for a few hours or a few months.
Maryland Changed Its Constitution for Sports Betting
Changing Maryland’s constitution to include gambling has already occurred. In 2020, with a 2-1 margin, Marylanders overwhelmingly voted for sports betting legalization. The state authorized sports betting in 2021, and sportsbooks launched in November 2022. There are 10 online sportsbooks in Maryland, and tax revenue goes to education funds.
Supporters of online casinos are hopeful that if a bill makes it to the ballot in 2024, it will share a similar fate.
Marylanders have responded well to sports betting, and revenue after six months ranks close to Ohio’s. The Buckeye State launched slightly over a month after Maryland, but it has twice the population. In addition, Maryland shares a border with states with online casinos.
That means some residents are likely crossing borders and gambling in those states. Of the six states with live legal online casinos, Maryland shares a border with Delaware, Pennsylvania, and West Virginia. New Jersey is just 20 miles away, across Delaware.
Connecticut and Michigan are far away. Plus, Nevada only allows online poker and is across the country.
Rhode Island just legalized online casino gambling, but it won’t launch until 2024 and is also a long drive from Maryland.
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