The 2020 legislative session in Maryland doesn’t begin until January 8, but thanks to state senator Chris West (R-42), a sports betting bill will be on the docket from Day 1.
West pre-filed Senate Bill 58 back in November to ensure that fellow members of the Maryland General Assembly will have the full allotment of time necessary to study and debate his sports betting proposal.
When the upcoming session commences next week, SB-58 will be taken up for a first reading by the Senate Budget and Taxation Committee. At the moment, SB-58 is merely a “shell” bill waiting to be filled out with details, but West does have a preliminary vision of Maryland’s potential sports betting industry in mind.
Early Structure of Maryland Sports Betting Bill Explained
As currently constructed, SB-58 would allow Maryland’s six casinos and five horseracing tracks to apply for one of the 11 sportsbook licenses made available.
If approved for licensure, these operators would then be permitted to offer onsite sports wagering via in-house sportsbooks. For the time being, West has elected to omit any allowances for online / mobile betting, a vertical he believes could complicate debate within the General Assembly.
As he revealed in a recent interview with Legal Sports Report, West feels that asking for online / mobile sportsbooks will lead to “all sorts of issues.”
Among the ostensible issues West alluded to are the struggling venues such as Timonium Raceway, located in his home district, which stand to benefit from brick and mortar exclusivity.
He also told the gaming industry news outlet that Maryland would be best served by securing any form of sports betting legalization before expanding the industry, warning “we should walk before we run.”
While the draft bill doesn’t list any specific tax rate on a sportsbook’s gross “win” revenue, West mentioned 20 percent – the same rate applied to casino table games in the state – as a comfortable starting point.
That figure is significantly higher than nearby New Jersey, where the nationally leading non-Nevada sports betting market charges an 8.5 percent tax on brick and mortar revenue. But with neighboring Pennsylvania opting for a 36 percent tax, Maryland’s rate of nearly half could make the state attractive to operators currently sitting on the sidelines in the Keystone State.
Taxes collected from sports betting operators would be used to fund educational programs and initiatives throughout Maryland.
Per estimates provided to Legal Sports Report by West, a 20 percent tax rate would generate between $40 million and $60 million in annual revenue for the state.
However, as the outlet observed, those forecasts of between $200 million and $300 million in combined operator revenue are generous at best given New Jersey’s thriving retail + online / mobile market will likely cap out at just over $300 million this year.
SB-58 Shifts Focus from Legislature to Ballot Referendum After 2019 Failure
West floated a sports betting bill in the 2019 session as well, but SB-470 was more of a trial balloon than an actual proposal seeking passage.
That’s because influential Maryland lawmakers imposed an informal moratorium on legislation which would call for a public vote on the 2020 ballot.
Both of West’s bills would put the matter of sports betting regulation to voters this November, asking the electorate to approve an amendment to the state constitution clarifying the industry’s legality.
West and his allies on the sports betting front previously explored legislation in 2018, but Governor Larry Hogan’s office made it clear that the state constitution requires voter confirmation.
Last year’s attempt by lawmakers to circumvent the ballot by legalizing sports wagering through the state lottery was roundly rejected as an “end-around” maneuver.