Maryland Sports Betting Bill Moves One Step Closer to Passage

Sportsbook Board Image Cut Into Closeup Image of Man Working on Laptop

Maryland’s Senate passed an amended version of the House’s Maryland sports betting bill via voice vote on Thursday morning, moving the state’s sports betting bill industry one step closer to becoming a reality.

While the senate already passed the bill, they will still have to take it to a roll call vote to have the numbers on record before sending it back to the House for a concurrence vote due to the amendments made by the Senate.

Amended HB 940

House Bill 940 was originally passed in the House on March 11. That draft provided for a total of 37 licenses within three areas of the market. However, the Senate chose to amend the bill and include no cap on mobile sportsbooks or Class B licensing, which includes any number of retail locations. The amendment also called for the prioritization of giving licenses to women and minority businesses.

The Senate also set the tax rate for Class A operators to 15% of gross gaming revenue as compared to the tiered proposal by the House. As for Class B Maryland sports betting operators, the tax rate is 13%. Application fees for licenses were priced at $2M with a renewal cost of $500,000 for Class A licenses and $1M in application fee plus $300,000 in renewal for Class B licenses.

What’s Next for HB 940?

The Maryland sports betting bill now moves to a third reading, likely on Friday, and then it will be sent back to the House for for a vote on the latest draft on the measure. Time is of the essence for HB940 as the General Assembly ends their 2021 session on Monday. If the bill is passed, Maryland sports betting could go live before the start of the 2021 NFL season.

Maryland sports betting stands to become the largest and most competitive sports betting regulated sports betting industry in the United States with no limit as to the number of legal Maryland sports betting operators. Maryland is known as the Free State and if this Maryland sports betting bill is approved, the state will live up to its nickname

Maryland Sports Betting Bill Heads to Senate After Securing House Approval

 

Odds Board and Money

The Maryland House of Representatives voted 130-9 in favor of House Bill 940 which would legalize sports betting in the state.

The version of the bill approved on Thursday was much more expanded from what was initially filed The original version called for 10-stand alone digital licenses and allowed retail and mobile sportsbooks at or tethered to the state’s existing casinos. But after discussions with stakeholders, the House Ways and Means Committee amended it to be more inclusive.

Online and In Person Betting

HB 940 would allow online betting at Maryland’s six casinos and the three stadiums where the state’s three major professional teams play, as well as horse racing tracks. The bill also permits 22 locations where people could place bets in person.

The Maryland sports betting bill also requires operators to remit 15% of their revenues as taxes. Applications would cost $250,000 for Class A Licenses, and $500,000 for stand-alone mobile platforms. Renewal fees are valid for five years and are worth $500,000 and $100,000, respectively. Meanwhile, brick and mortar casinos are allowed one skin or mobile partner.

Inclusion of Pro Venues

The locations which are allowed to operate a physical sportsbook include the state’s six existing casinos, the Washington Football Team’s FedEx Field, the Baltimore Ravens’ M&T Stadium, the Baltimore Orioles’ Camden Yards, the Maryland State Fairgrounds, Pimlico and Laurel Park horse racetracks, and one off-track betting parlor.

However, the approved version of the Maryland sports betting has a unique provision for the sports venues. Unlike in other states, Maryland sports betting allows venues to take sports bets in ticketed areas and those areas are open only during events, games, or when races are held. The said venues could also offer wagering when other events are held at the facility but there is a required number of people present for it to be considered as “game days”- 2,000 for race tracks and 10,000 for sports venues.

Maryland Expected to Launch Later This Year

The Maryland lawmakers are in session until April 12. If Senate does approve the bill, it will be sent to Gov. Larry Hogan for his signature. The bill would take effect on June 1st but there appears to be no timeline set for regulators to promulgate regulations or get operators.

Generally, it would take a state between six months to one year to approve regulations and launch sports betting operators. Neighboring Virginia legalized sports betting in April 2020. The first sports bet taken in the Volunteer State was on January 21, 2021. On the other hand, Colorado legalized sports wagering in November 2019 and operators began accepting bets in May 2020. Maryland already has a gaming structure so experts believe that sports betting can launch there later this year.

Penn National Acquires Operations of Hollywood Casino in Perryville

Penn National Gaming
Penn National announced on Tuesday that it has reached an agreement with Gaming and Leisure Properties Inc. to acquire the operations of the Hollywood Casino in Perryville for $31.1M.

The regional casino operator will pay for the transaction in cash and it will also lease the property from GLPI for $7.77M per year. The deal is expected to be completed in the middle of 2021 but pending the approval of the Maryland Lottery and Gaming Commission. Once consummated, Penn National will have operations in 20 states throughout the United States.

Said Penn National President and CEO Jay Snowden:

“With the recent approval of sports betting through the overwhelming passage of Question 2 on Election Day, Maryland is expected to soon become a significant retail and mobile sports betting market.”

Maryland Legal Sports Betting

During last month’s elections, Maryland voters favored legal sports betting in the state by a margin of about 2 to 1. The vote enabled the Old Line State to join neighbors Delaware, Pennsylvania, West Virginia, and the District of Columbia as states which have legalized sports betting since the U.S. Supreme Court repealed the 1992 Professional and Amateur Sports Protection Act.

With the people’s approval, the onus is now with Maryland’s General Assembly to develop and approve the structure for Maryland legal sports betting. The structure would outline among others which businesses can apply for a license, how and where fans could place bets, and how the revenues would be shared between the state and operator. Once the rules are finalized and legislation is enabled, state analysts expect Maryland legal sports betting to generate an annual revenue of $18.2M for the state for both in-person and online sports betting if operations are taxed at 20%.

Part of April Deal with GLPI

The Perryville Hollywood Casino was actually developed by Penn Gaming in 2010. GLPI assumed ownership of the Perryville property in 2013 when Penn National split its casino operations from its real estate business. Last April, Penn struck a deal with GLPI to sell Tropicana Las Vegas for $305.7M in rent credits. The agreement allowed Penn to retain operations of the Strip resort and it was given the right to acquire Hollywood Casino in Perryville.

Penn operates 41 properties in 19 states while offering retail and online gaming, live racing, and sports betting entertainment. Its casinos and hotels have an aggregate 50,000 gaming machines, 1,300 table games, and 8,800 hotel rooms operating under brands such as Ameristar, L’Auberge, and Hollywood.

Maryland Casino Gaming Revenue Decreases in November

Closeup of Person Counting Money With a Casino Background
Maryland’s casinos saw a large revenue drop in the month of November. The decrease comes after the casinos had been making good gains following a statewide shutdown due to the coronavirus pandemic.

In a report by the Maryland Lottery and Gaming, the six Maryland casinos generated a gross gaming revenue (GGR) of $130.3M, an amount which is 8.6% lower than the previous month total of $142.7M. The amount is also $10.4M or 7.4% less than the aggregate revenue posted by the Maryland casinos in November 2019.

Maryland Casino Breakdown

$83.43M of the GGR was derived from Video Lottery Terminals (VLT) while table games contributed $146.94M to the total revenue. Live! Casino and Hotel led the way with a VLT total of nearly $30.9M, beating out the $29.8M of MGM National Harbor. As far as table games are concerned, MGM National Harbor was way above the rest with its $25.5M table games intake.

MGM National Harbor remained the top earning casino during the month of November as it raked in a total of $55.3M or 42.4% of the state’s total GGR. Live!Casino and Hotels came in second with its haul of $45M while Horseshoe Casino in Baltimore was a far third with a monthly revenue of $15.25M. Horseshoe Casino though operated at a lower capacity for the most part of November due to new restrictions enforced in Baltimore.

Horseshoe Heavily Affected

After being allowed to open at 50% capacity for two months, the city of Baltimore tightened the restriction to 25% capacity for restaurants, gyms, retailers, and casinos beginning November 12th due to a surge in COVID-19 cases. Being the only Maryland casino in Baltimore, Horseshoe was badly hit by Mayor Bernard “Jack” Young’s decision.

Horseshoe’s November 2020 GGR is an all-time monthly low for the Caesars Entertainment owned Maryland casino. It’s the latest setback for Horseshoe which has struggled since Caesars won the Baltimore license in 2012. The company has been trying to reverse the Baltimore casino’s fortunes in recent years but to no avail.