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Legislature to decide next step for betting on sports

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What happens under the roof of a $12 million project at Hanover’s Live! Casino is now up to the Maryland House of Delegates.

The legislators will decide if Sports & Social will simply be presented as a sports bar – or a sports bar with gaming.

Photo credit Wpadington.

The voters approved more gaming and entertainment options at the state’s casinos by a two-to-one margin on Nov. 3. Now, the lawmakers in Annapolis need to setup the infrastructure for a new gaming industry in the state.

Advocates for legalizing gaming believe that Maryland will raise tens of millions of dollars in tax revenue to support public education and remain competitive with neighboring states for gambling dollars.

Something New

To house the new activity, the Cordish Companies is building “a one-of-a-kind restaurant, gaming and social lounge for those seeking the ultimate sports fan experience.”

Serving a classic American grill menu, the 212-seat establishment will feature a state-of-the-art audio-visual system with more than 100 linear feet of LED screens, including the 47-foot-wide main screen.

Every guest at Sports & Social will have the option of watching up to 10 games at once.

In addition, the venue will feature two main bars, VIP lounges, tiered lounge chairs, casino games and an assortment of interactive social games, including mini-bowling and oversized foosball.

Jake Joyce, chief marketing officer for Live!, said the new venue will be similar to those featured at Cordish casinos in Atlanta, Kansas City and Pittsburgh, in unison with the FanDuel Sportsbook.

“It will be very similar to The Hall at Live! (the casino’s music and entertainment venue) in that it’s something that no casino in the region has ever built,” he said.

Joyce called Sports & Social “a place for conversation and interaction where you can also place a sports bet at windows and kiosks, and hopefully via mobile app if the law passes. I don’t see the MGM National Harbor or Horseshoe Casino Baltimore developing similar offerings.”

He said the C-suiters at Live! are hoping to debut the venue “during the spring, to coordinate with when many more people get their COVID-19 shots.”

Revenue Reality

Greg Gemignani, partner with the Las Vegas law firm of Dickinson Wright, said that the nationwide expansion of legal sports wagering is remarkable.

“Just look at what’s happened during the last 10 years,” said Gemignani. That industry “has gone from a pariah to something that’s largely accepted, from unthinkable to unstoppable. There is great demand, legal or not. And this has happened socially and legally.”

Opening new venues that integrate betting and entertainment has been going on for a long time in Nevada, he said, “and there’s still plenty of gaming going on illegally when in-state operations are limited. So, I think you’ll see more of this around the country.”

However, Gemignani said, the industry isn’t the end-all for revenues for the casino or taxes for the state that some observers are presuming that it will be.

“It’s very price sensitive because it’s very competitive. It’s good revenue but not earth shattering,” he said. “That’s why the food and beverage part of the equation is key to the mix.”

Sports betting is considered a “low-margin gaming vertical,” said Will Dennis, spokesperson for the Washington-based American Gaming Association, “with $95 of a $100 bet going back to the gamers. From the $5 casino take, it has to pay salaries, taxes, licensing, marketing and other overhead costs. And it’s obviously highly volatile. Underdogs win sometimes.”

That makes mobile wagering a big deal.

“Most of the states with legal sportsbooks have allowed for mobile wagering. That’s a hugely important source of revenue,” Dennis said, “and some studies have shown that more than 85 percent of bets are sourced in from mobile apps.”

‘Heavy Lifting’

Many gamers are already placing bets on their phones and computers, said Jeff Ifrah, founder of Ifrah Law, Washington, D.C. “By legalizing it in Maryland, the money is coming into the state and the tax money will stay there.”

What will eventually happen, Ifrah said, “is that not only casinos but restaurants will draw more people who are not only gambling, but also buying food and drink, which will bump up their revenues. In fact, more revenues will be raised that way than from gaming.”

What’s next?

“The restaurants need to figure out a way to work sports gambling into their entertainment offerings. There are different ways to approach that part of the issue,” he said, like becoming an official FanDuel restaurant or a hotspot for followers of online sports books.

As for the business at hand, “The legislature has to do the heavy lifting,” Ifrah said. “When the ban was lifted by the Supreme Court (in May 2018) that paved the way for state legislatures to learn more about sports gaming and considerate it. Since Maryland already has regulated gaming,” there is familiarity with the issue and regulatory concerns.

Ifrah said he is confident that the final legislation will be passed and then state regulators will go to work setting up the operational details.

Next Step

As for getting sports gaming up and running, “I think everything is proceeding well,” said Sen. Craig Zucker, who introduced the bill. “Work groups will start soon and it will be a transparent process with everyone at the table. We’re going to have to make sure that we include minority businesses in the deal and stay competitive with nearby states but we well get it done.”

Zucker added, “And since we’re in the midst of the pandemic, the additional money we can raise to go toward education will be extremely beneficial.”

Joyce said, “If it takes us longer to get [sports gaming legalized], so be it but it’s our belief that we can make Live! much more successful by providing great customer experiences, like we can offer with the addition of Sports & Social.”

By Mark R. Smith | Senior Writer | The Businsess Monthly | February 2021 Issue

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