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Is Maryland ready for the sports betting game?

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West Virginia, Pennsylvania and Delaware have voted sports gaming into law.

Maryland, the District of Columbia and Virginia have not.

Those last three facts will be under discussion when the next legislative session starts at noon on Jan 9, in Annapolis.

Session 2019 will come after the House passed a bill to allow sports gaming in Maryland, but the Senate did not; and on the heels of a recent Washington Post-University of Maryland poll that revealed that, while voters likely will have to wait at two years to decide whether to legalize sports gambling, 53 percent of registered voters favor doing so (with 37 percent opposed and 10 percent having no opinion).

D.C. and Virginia are also making noise about legalizing gambling, period; but even if sports gaming is approved in both states and the District, it won’t result in a huge windfall, as was the case with the approval of slots.

Where we are today,” said Frank Turner, recently retired delegate from District 13, who sponsored the sports gaming bill last session, “is in limbo. I haven’t seen a bill put in for the upcoming session, but it’s likely one will be. Then the question becomes, ‘Will there be an agreement between the House and the Senate as to what the bill will look like?’ ”

Last year, the House wanted sports gaming at the only wanted it at casinos. “That’s the hang up,” Turner said, “and I don’t think either side is rushing to take a position, since it can’t come into play until 2020, when it has to go to referendum”

As for what legalization would mean for Maryland, Turner said in Las Vegas sports gaming only accounts for “5 percent to 6 percent” of gambling revenues, “so I don’t think it would be the kind of windfall people might assume it would be.”

The state gets about $1.4 billion from casinos and $1 billion from the lottery, he said. “Sports betting won’t stop that.”

The deal today, he said, is that “people who really want this are very vocal, and they don’t want to drive [out of state] or go to Vegas to get it.”

While Maryland has come to the gaming party later than other states, Turner isn’t sure that’s a bad thing.

“People complained about how late we got into gaming here, but Maryland is far ahead of other states in [gambling] revenues,” he said. “Much of that is to do with D.C. and Virginia not having it. We even get people from North Carolina who come here and sightsee, too.”

Three Points

Jeffrey Hooke is managing director of Hooke Associates, of McLean, Va., and a senior lecturer with The Johns Hopkins University, and he thinks enabling legislation will occur by mid-2019. “Maryland almost got there last time,” he said, offering three issues to contemplate until then.

First the legislature “must address whether they will give away licenses for free, as most states do and as happens with casino licenses, or sell them to large corporations. They have a market and are worth millions. The state must address that point from a taxpayer point of view.”

Next, the state “will need a regulatory system” to police illegal conduct, such as inside information, bribes, and so on. “How are bettors being screened?,” he said. “Other states haven’t put much effort into monitoring the integrity function.”

Lastly, the 75-year-old Wire Act, a federal law that prohibits information sharing on national level for horse racing, “needs to be updated, since it restricts the sharing of betting patterns across states. The immediate goal here,” said Hooke, “is to legalize sports gaming in every state, give away the licenses for free and try to have a low betting tax rate – then establish the integrity system on the state level.”

Nationally, 10 states have authorized sports betting and approximately 20 others are pursuing authorizing legislation, which is not lost on Joe Weinberg, CEO of Cordish Global Gaming, which runs Live! Casino, in Hanover.

“Maryland, with one of the smallest populations in the U.S., has the fourth highest gaming tax collections in the country, with more than $3.5 billion to date,” he said. “It is important that Maryland casinos continue to have the ability to offer a full suite of products to remain competitive with surrounding states which already offer, or will shortly, allow sports betting.”

‘Volatile Market’

That “could well happen in 2020,” said Jennifer Roberts, associate director at the International Gaming Institute at the University of Nevada Las Vegas.

“What’s going on in the mid-Atlantic is like the Mississippi-Louisiana relationship, where residents of Louisiana gamble on sports in Mississippi,” she said. “The politicians of Louisiana would rather have their people gamble on sports in state.”

Roberts also said the revenues would not amount to as much as people think, however. “For instance, before the last Super Bowl (LII), customers at the 198 sports books in Nevada wagered $158 million – combined, they made $1.17 million. That was it,” she said, though noting that other Super Bowls “made much more money. It’s a volatile market.”

So, don’t expect the earnings in Maryland or anywhere else to pay for new schools, roads or bridges. “But it will add to employment and keep some money in the state,” she said.
Revenue Plus

While Turner would “like to see agreement between the Senate and House,” there won’t be any pressure this year to get it done.

In addition, he said, the state has a $1 billion surplus in revenue, “so there’s no pressure to raise more money. There will be in a couple of years, because educational bills need financing and prescription drugs for retired state employees need funding,” he said, “plus the economy could [weaken].”

With Turner retired, the point man for a bill will be Del. Eric Ebersole (District12, Howard and Baltimore counties), subcommittee chair for finance resources in the Ways and Means Committee, the umbrella group for all gaming interests. He agrees that it’s hard to ignore any extra money that sports gaming would generate, as well as a new synergy it would provide for the overall gaming market.

“Many people will be looking forward to the additional financial resources,” said Ebersole, noting it could be directed to making community colleges debt free, 3-4 year old pre-kindergarten, school construction, etc.

“There would be,” he said, “plenty of places to spend it.”