After the 2018 repeal of the now-infamous PASPA, legislators nationwide have been pressing ahead with sports betting expansion at full speed. Maryland is one of the latest states to legalize this form of gambling. For years, Maryland restricted itself to legal lotteries and horse race wagering but is now on its way to become a full-fledged betting state.
Residents gave the thumbs up to legal sports wagering with an overwhelming majority during a referendum in November 2020. Once the referendum was over, it was up to the state’s General Assembly to draft and approve new legislation for the oversight and regulation of the state’s young betting industry.
Bill HB940 Legalized Sports Wagering in Maryland
Maryland lawmakers succeeded in doing just that in April 2021. Governor Lawrence Hogan signed bill HB940 into law one month later, officially legalizing sports wagering in the Free State. The newly introduced bill allows for legal mobile and retail betting on sporting events. The Maryland Lottery and Gaming Control Agency are to oversee the sector and issue licenses to the approved operators.
The watchdog has approved as many as 17 land-based venues, but they must obtain operating permits before they can legally take action from local punters. Some of them include Horseshoe Casino, Hollywood Casino, MGM National Harbor, and Maryland State Fairgrounds. The legislation allows for up to 60 online betting licenses and around 50 retail ones.
This is great news for punters from the Free State who will have plenty of legal betting options to choose from. The new rules require online operators to partner with a local retail business before they can launch their mobile apps. Geolocation will be in place to ensure compliance with the law, enabling licensed operators to determine whether remote punters are within Maryland’s borders.
Class A and Class B Sports Betting Permits
Each mobile account will be subject to rigorous verification to ascertain registrants are indeed who they say they are. Verification procedures also aim at preventing underage gambling as only Maryland residents aged 21 can legally punt on sporting events. The new law contains provisions about two types of betting permits, Class A and Class B.
Gambling and sports-related companies are eligible for Class A licenses, while Class B permits are intended for business entities that are not directly linked to the betting industry, such as restaurants and bars.
The state’s six land-based casinos, sports stadiums, and racecourses are eligible for Class A permits. The application fees for the two tiers of Class A licenses are $2 million for A-1 and $1 million for A-2 permits. Additionally, applicants must contribute license bonds to the amount of $6 million (A-1) or $3 million (A-2).
Commercial bingo halls and off-course wagering parlors can apply for Class B licenses. Regardless of the permit category, interested parties must go through a competitive bidding process. Approved businesses will have to pay US$50,000 upfront for their B-2 licenses, while annual renewal of the permits will cost them US$10,000.
The annual tax rate for licensed operators is 15% on their revenues. Licenses for the operation of mobile-only sportsbooks come with $500,000 application fees and $1.5 million for license bonds. Regulators have yet to finalize their decision about the betting markets Maryland residents can legally punt on. There is a good chance most professional and collegiate events will make it to the list of eligible options, including the NHL, NBA, MLB, NFL, and NCAAB.
Wagering on non-sporting events like the Academy Awards is also likely to become available to Maryland punters. The expectations are for sports betting to launch in Maryland by early 2022. As for the question of whether the newly adopted betting laws and regulation in Maryland are adequate, it is fair to say they are.
A regulated sports betting industry will benefit both punters and the state. Locally licensed sportsbooks will offer higher levels of protection to consumers, who in turn will finally have legal recourse if they enter into any disputes with the operators. Regulated bookmakers normally take their customers’ well-being seriously, ensuring a safer environment with responsible gambling at the forefront.
Given the number of licenses, bill HB940 allows for, the last thing Maryland punters can complain about is lacking enough legal options. Last but not least, the launch of legal sports betting translates into more funds for the state in the form of tax money and a lower outflow of capital to unauthorized offshore operators.