Maryland Opens Application Process For Sports-Betting Licenses

September 7, 2022
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Maryland's Sports Wagering Application Review Commission (SWARC) has begun accepting license applications from those companies interested in operating mobile sports betting and in-person retail wagering at locations throughout the state.

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Maryland's Sports Wagering Application Review Commission (SWARC) has begun accepting license applications from those companies interested in operating mobile sports betting and in-person retail wagering at locations throughout the state.

The SWARC’s announcement on Tuesday (September 6) came four days after the Maryland legislature’s Joint Committee on Administrative, Executive and Legislative Review (AELR) approved the commission's proposed regulations for awarding competitive licenses for additional gaming locations and mobile sports wagering.

The seven-member commission had been waiting on the legislative committee to approve the regulations before kicking off the application process for up to 60 online sports betting licenses and up to 30 so-called Class B facility licenses for retail sportsbooks at locations other than casinos, racetracks, sports stadiums and certain other venues.

Among Class B retail licenses, there are two categories. Class B-1 licenses carry a non-refundable fee of $250,000 and are for businesses with 25 or more full-time employees, or those with more than $3m in annual gross receipts. For Class B-2 licenses for businesses with fewer than 24 employees and less than $3m in revenue, the fee is $50,000.

According to the Maryland sports-betting law approved last year, a mobile sports-betting license costs $500,000 upfront.

Prospective operators now have 45 days to submit their applications ahead of an official submission deadline of October 21. After the deadline, SWARC has up to 45 days to review the applications while the Maryland Lottery and Gaming Control Agency conducts background investigations to determine whether applicants are qualified for licenses.

Applicants must be found to be qualified before they can be awarded licenses by SWARC.

“Maryland Lottery and Gaming has been hard at work on background investigations,” director John Martin said in a statement on Tuesday.

“A number of businesses that are planning to apply for mobile licenses have already submitted information to get their investigations started, and licensing staff will continue guiding them through the qualification procedures.”

Martin said officials remain focused on expediting their part of the process for mobile wagering can begin as soon as possible in Maryland.

Prior to AELR approval on Friday, the commission had published its set of approved proposed regulations in the Maryland Register on August 26, beginning the 30-day comment period on the draft rules.

The SWARC will hold a public hearing on the regulations on Friday (September 9) in Baltimore. Public comments on the regulations will be accepted through September 26, after which they will be considered by gaming regulators.

“This is fantastic news,” Martin said of the legislative approval of the regulations. “We’ve been doing everything we can to have it launch by the end of the year, and now we have a good chance to make it happen.”

Sports Betting Diversity Requirement

On Friday, the SWARC unanimously approved an amendment to its rules that will require companies awarded mobile or retail sports-betting licenses in Maryland to then submit a diversity plan.

The plan, to be submitted to SWARC within 30 days after licensure approval, should include a strategy for obtaining a diverse group of owners, investors, employees and contractors, as well as diversity objective adopted by the applicant and methods for tracking the achievement of those objectives.

Among the other requirements are proposed deadlines and benchmarks for achieving the diversity objectives, and to the extent available, the diversity status of each owner, investor, employee and contractor.

An applicant must also check “yes” to three boxes that confirms that within 30 days after being awarded a license, the operator will submit its diversity plan and will make a good faith effort to meet the diversity objectives outlined in the diversity plan.

Licensees also need to report diversity metrics to the Maryland Lottery and Gaming Control Commission and agree to make their diversity plan available to the public.

“SWARC will consider any type of diverse group where an applicant can demonstrate that an individual has been disadvantaged and, therefore, inclusion of the individual as a participant in the diversity plan would be beneficial,” according to the amendment.

David Stamper, assistant attorney general who works with the SWARC, told the commission that if they deny the initial plan then the licensee will be required to resubmit it.

“Ultimately, that plan is going to be posted publicly,” Stamper said. “There aren’t financial penalties. They are already going to have their license and will be submitting a plan. There is not an opportunity at that point for cancellation of the license.”

James Butler, assistant deputy director and chief of staff with the Maryland Lottery and Gaming Control Agency, said the lottery and the commission will work with a licensee “to take any corrective action” to ensure their plan meets diversity standards.

Legislation authorizing land-based and mobile wagering in Maryland was signed into law by Republican Governor Larry Hogan on May 18, 2021, but so far only retail betting has launched in established casinos and other established gaming venues.

Ensuring equity and diversity within the state’s sports-betting industry was a key part of the legislation, especially since minorities and women were, for the most part, left out the licensing process when the Maryland medical cannabis industry launched in the state almost five years ago.

As part of its rulemaking process, SWARC was required to evaluate whether it could set specific criteria to ensure adequate participation by minority- and women-owned businesses in the sports-betting market.

Rather than set specific licensing thresholds based on race or gender, however, the regulations instead require that any sports-betting operator must be at least 5 percent owned by persons with a net worth of less than $1.85m.

Darryl Barnes, a Democratic representative and chairman of the Maryland Black Legislative Caucus, was unavailable for comment Tuesday.

Since Hogan signed the bill, Barnes has appeared at several events warning industry executives and others that if minorities are not included in sports-betting deals than those deals are not going to happen in Maryland.

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