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Senate Committee Fine-Tuning Maryland Sports Betting Legislation

With a deadline looming Monday, Maryland sports betting legislation is still a work in progress.

The Maryland Senate Budget and Taxation Committee held a sports betting workgroup Tuesday to focus on HB 390. The full committee then discussed the group’s proposals and could add amendments before an expected vote Wednesday morning.

An informal vote by hand during Tuesday’s meeting showed the bill has support.

MD sports betting legislation has been in the works this year after voters approved sports betting in November 2020.

The House passed its version of the bill March 11. Changes by the Senate were expected, but Sen. Craig Zucker previously told LSR the chambers would work closely together.

“We are going to get sports betting done this year,” Zucker said during Tuesday’s meeting.

Maryland sports betting licenses a key discussion point

The House bill would implement 37 licenses, including:

  • 12 Class A licenses for casinos, horse tracks and stadiums
  • 10 Class B licenses for local businesses
  • 15 licenses for mobile

Class B and the mobile licenses would be available by competitive bid.

Even more detail on license types

The Senate workgroup proposal breaks it down a little bit more and leaves it more open-ended:

  • Class A-1: horse racing licensees, professional sports facilities and video lottery terminal operators with more than 1,000 machines. They would have a $2 million initial fee with a $500,000 renewal fee.
  • Class A-2: a video lottery terminal operator with fewer than 1,000 machines. They would have a $1 million initial fee with a $300,000 renewal fee.

Both A-type licenses would contribute to a fund to help minority-owned and women-owned businesses succeed in the industry.

  • Class B-1: would have license fees of $250,000 and a $50,000 renewal fee.
  • Class B-2: includes entities with less than 25 employees and $3 million in receipts. They would have license fees of $50,000 and $10,000 renewal fee.
  • Mobile: a $500,000 fee and $100,000 renewal fee. There would be no limit on mobile licenses.

There are radius limits the committee felt could provide a competitive advantage to early market entries. Those limits might be on the chopping block in the final Senate bill.

The workgroup’s stated goal is to create a relatively free market while achieving minority and women-owned sportsbook requirements.

“We wanted to make sure everyone had an opportunity to have skin in the game and have an opportunity to not only be part of this but to grow, especially when it comes to small minority- and women-owned businesses,” Zucker said.

Senate committee changes up sports facilities limitations

In the original House bill, MLB’s Baltimore Orioles ,and the NFL’s Baltimore Ravens and Washington Football Team could have a Class A license. However, they could only accept bets on game days with 10,000 people in ticketed areas.

The Senate committee workgroup proposal took out those restrictions and allows for year-round sportsbook operation. Currently, the teams would “control their airspace” allowing fans to only use the partner sportsbook in the stadium, according to committee testimonies.

They did implement a stipulation if a sports facility partners with a casino, it must be located in the same county.

DC sports betting allows for stadiums to allow anyone to bet at a stadium sportsbook. William Hill operates a sportsbook at Capital One Arena, home to the NHL’s Washington Capitals and NBA’s Washington Wizards.

Maryland sports betting tax structure

The committee proposal streamlines the sports betting revenue tax structure:

  • Class A-type and mobile licenses would be taxed at 15%.
  • Class B-type would be taxed at 13%.

The original House bill taxed sports betting revenue at 15%, with a mobile escalator to 17.5% once revenue hit $5 million.

Maryland sports betting on its way

Last year, the Senate approved a full bill for voters to consider. The House stripped out the language before the election.

So while voters approved MD sports betting, there are no rules guiding the practice. Legislators aren’t required to fully enable sports betting this year, but it is expected.

Should the committee pass the bill Wednesday, the full Senate will likely vote on it this week and the House will need to vote on any changes before the end of the legislative session Monday.

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