Maryland Online Gambling Bill Most Comprehensive in U.S.

On May 18, Maryland Governor Larry Hogan signed the state's online sports gambling legislation. After peeling back the layers to see what is inside the bill, it is clearly the most comprehensive online sports gambling bill in the U.S.

What truly impresses about this bill is it allows for up to 60 different online operators to take sports bets from Maryland residents. The breakdown of potential licensees reads as follows: 17 established gambling entities (casinos, sports franchises, racetracks, OTBs, bingo halls) and up to 30 smaller business interests will share access to as many as 60 online sports betting licenses. That number far exceeds what any other state has approved.

According to Brendan Bussmann, director of government affairs for Global Market Advisors, this is what he is calling the “Oprah Bill,” following up by adding, “YOU get a license, and YOU get a license, and YOU get a license.”

It's notable the contrast Maryland has created in comparison to highly populated states like New York and Florida. In those states, control over online sports betting and casino gambling will be closely held in the hands of very few operators, perhaps only one in New York.

For the record, the new bill will require each approved operator to pay a one-time $500,000 licensing fee. They will also need to pay a flat tax rate of 15% on gross gambling revenue. Those numbers are pretty much reasonable and in line with many other states.

The Reality of the Situation

Regardless of what the sports gambling law says, the laws of economics will also play a role in what's going to happen. It's a good bet the established gambling interests will be looking to secure a license. In terms of the licenses that might be available for smaller business interests, there are two potential problems.

First, the $500,000 licensing fee could be a bit prohibitive. That's a big number for a small chain of liquor stores to hand over to the state. The second potential problem has to do with saturation. If the state hands over too many licenses, making a profit could be a real challenge for business interests in smaller cities.

Looking at it realistically in reference to how many operators might join the fray, Bussman stated: “You can’t get to 60. If everybody played in the space who probably has an interest, and you leave maybe 10 percent over that for potential new market entrants, you might get to 30, but that’s a stretch.”

When the Betting Action is Likely to Start

By all indications, it looks like online bookmakers might be aligning under one of two timeframes. For the states established gambling interests, the approval and licensing process could be expedited. That leaves open the door they will be able to start taking bets by the start of the 2021 NFL season.

For smaller business interests and outsiders, the approval process could take much longer. That would leave many of them having to wait until the start of 2022 before taking bets.