The move to legalize all forms of gambling in Maryland state has seen news develop fast. The General Assembly voted in favor of new legislation earlier in April 2021 and prospective punters are eager to know just what happens next.

Around 30 licenses have been issued which will allow for new operators to move into the territory and offer a range of services. Along with the question of when, everyone in the state is also anxious to know what they can expect as the betting landscape changes.

Revenue Boosts

Along with other states in the nation, Maryland can look forward to a boost in revenue thanks to the new rulings. Tax is applied to gambling operators at point of sale, and this can provide significant input into state coffers.

The first area of revenue is, therefore, via the point of consumption and this currently stands at 21%. There are other bills to pay for operators intending to provide services in Maryland including a range of application fees. It all adds up, so we are already seeing how other states are earning significant revenue via direct taxation.

Another area that can’t be measured so easily concerns the increase in job opportunities within the sector. This specifically relates to bricks and mortar establishments that will arise in the wake of the general assembly’s announcement. Sports betting halls and, potentially, additional casino premises will provide an additional boost to Maryland’s employment figures.

Licenses Awaiting Process

Operators looking to set up services for Maryland residents must be licensed in order to trade. There are two separate licenses in question – Class A and Class B – and companies must have one of these in order to operate.

A class A license applies to existing casinos and tracks that are already trading within the state. Class B license will allow for additional retail and mobile operators subject to certain restrictions. Firstly, any operator with a class B license must be physically situated at least 10 miles away from a class a competitor.

Significant fees also apply, and this is another area which offers great potential to add to state revenue. Application fees for a class A license come in at $250,000 while they drop to a more manageable level of $50,000 for class B.

Extra funds are required to extend the business: For example, any company wishing to provide online betting services must find a mighty $500,000 upfront. Finally, any provider looking to add mobile betting services to their roster must find another $100,000.

It’s clear as to where the state government feels that the money will be generated. It should, however, also make sure that those fees aren’t prohibitive. Initially, around 30 licenses will be awarded, and Maryland governors will then have an idea on initial take up, together with projections for the future.

Over the Border

In 2018, the United States Supreme Court overturned an earlier PASPA ruling that had effectively outlawed sports betting across the country. Since then, a number of states have moved to integrate sports betting halls into established casinos, while the overall gambling landscape has also been relaxed.

We can, therefore, identity a number of precedents when predicting the future for the gambling sector in Maryland. If, for example, we look at our neighbors in West Virginia who can bet legally, we can identify the benefits and any potential downsides that new legislation has provided.

Firstly, we can consider revenues from sports betting which have been assessed since the practice was made legal in August 2018. In that opening month, the state produced a modest few thousand dollars but, by December of that year, the figures had already exceeded $2 million in gambling revenue on a monthly basis.

Fast forward to the end of 2020 and those figures were leveling out to just over $4 million per month.

Maryland’s Numbers

While nothing is ever guaranteed, we can potentially use those figures to project some potential revenue for Maryland moving forward. Neither West Virginia nor Maryland has a long history of established casino play in the physical world, so they are both making a ‘standing start.’

The current population of West Virginia is around the 1.8 million mark while in Maryland, the numbers jump to a significant figure in excess of 6 million. Using some very elementary math, we might conclude that Maryland’s monthly gambling revenue may come in at somewhere between $12 million and $13 million.

There’s no great science behind that calculation but it clearly shows the potential for income and overall benefits within Maryland.

Potential Obstacles

In regard to any potential barriers to a smooth transition, there is the question of high fees, but similar sums haven’t deterred operators in other states around the country. High upfront fees and subsequent taxes can also help the underground gambling scene to thrive, so this is one area that Maryland will need to monitor.

Any move to legalize gambling will always be met with a mixed reaction but other states have shown that revenue benefits can outweigh any potential downsides. The vote has been cast and it will take some time for the industry to move but the wheels are in motion. By the end of 2021, Maryland will have operators on board, and it will start to see the results of this historic decision.


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