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The chairman of the Maryland Sports Wagering Application Review Commission (SWARC) sent a letter on Friday (August 26) to a legislative review committee urging lawmakers to approve the commission’s proposed regulations and allow the panel to begin the application process for competitive sports-betting licenses.
In a four-page letter to the Maryland Joint Committee on Administrative, Executive and Legislative Review (AELR), SWARC chair Thomas Brandt said it is apparent that the 60 available licenses for mobile sports wagering will be the most significant to achieving the legislature’s goal in its 2021 law of creating a “diverse and inclusive market.”
The commission approved emergency regulations and submitted them to the AELR on July 22.
“Without AELR’s approval, SWARC is not able to fully and properly build Maryland’s sports wagering program, including mobile wagering, which is central to the program’s success,” Brandt wrote.
He noted SWARC has been advised that it must wait for legislative approval of the emergency regulations before it can begin accepting applications. The commission also must wait for the results of a review by the attorney general’s office.
“After much work, we are nearly at the finish line, but we need your help,” Brandt wrote.
“The sports wagering industry is ‘seasonal,’ and the football season (September through the Super Bowl in February) annually generates much more activity than other times of the year. Thus, unless we move quickly, Marylanders will miss access to mobile wagering on the 2022 football season, and the state will miss out on the related revenue.”
SWARC, Brandt wrote, is eager to move forward and complete this process.
The commission on Friday published a set of approved proposed regulations in the Maryland Register, beginning the 30-day public comment period on the draft rules. Still, SWARC needs final AELR approval of the emergency regulations to begin the licensing process.
Jim Nielsen, deputy director and chief operating officer of the Maryland Lottery and Gaming Control Agency, said there will be a meeting on September 9 in Baltimore during which the public may comment on the regulations.
In an email to VIXIO GamblingCompliance on Sunday, Nielsen said the deadline to file comments with regulators is September 26. All written comments submitted during the period will be published online at swarc.org after the 30-day public comment period has closed.
The regulations govern the application process in which the SWARC will award up to 60 mobile sports wagering licenses, as well as up to 30 Class B retail licenses for wagering operations state-wide.
According to the approved proposed regulations, the state expects sports-betting to generate between $15m to $25m.
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, a mobile sports-betting license costs $500,000.
In his letter, Brandt also confirmed that SWARC has seen a preview of a sports-betting industry study that will guide the licensing process through the possible use of selection criteria to achieve diversity.
On August 19, the Maryland Department of Transportation informed the seven-member commission that the industry analysis had been completed.
Brandt wrote that the study’s author concluded that “he could not opine on whether the 2017 Disparity Study is sufficient to support any other type of race and/or gender-conscious remedy.”
“This means that based on the analysis, SWARC is not able to apply any race and/or gender-conscious criteria in its evaluation of applicants. Ultimately, SWARC decided to use a Personal Net Worth (PNW) provision.”
Under this provision, every applicant for a competitive mobile or Class B facility sports wagering license will be required to demonstrate that at least 5 percent of its direct or indirect ownership is by individuals with a net worth of no more than $1.847m.
“This PNW provision meets the definition of ‘disadvantaged business enterprises’ that is used elsewhere in Maryland MBE (Minority Business Entity) programs.
“SWARC believes this requirement will present a meaningful wealth-building opportunity, particularly for mobile licenses,” Brandt wrote.
