Maryland Senator Says iGaming Needed To Plug Budget Deficit

Editor’s Note: This story was updated with comments from Brendan Bussmann, managing partner with B Global in Las Vegas, on November 17 at 9:30 a.m-EST.

Democratic state Senator Ron Watson has said a new study submitted to the Maryland General Assembly makes it clear the state would benefit financially from a regulated online gaming market, although projected revenues are not enough to close an anticipated budget deficit.

“Our state has a decision to make,” Watson told Vixio GamblingCompliance on Thursday (November 16).

The report provided to lawmakers on Wednesday expected a 10 percent loss of state taxes associated with the “current" activities in the brick-and-mortar casinos or $98m in 2029, versus an increase of $300m in state taxes once iGaming comes online and is mature, again in 2029.

“The outlook for the state suggests revenues are forecast to grow 3.5 percent and ongoing spending is projected at 5 percent from 2025 to 2029,” Watson said of Maryland's overall budget situation. “In short, we have a structural deficit at the state level. This is a gap we must close, and iGaming can help.”

The iGaming report prepared for the Maryland Lottery and Gaming Control Agency (MLGCA) was submitted Wednesday by the MLGCA to the House Ways & Means Committee and the Senate Budget Committee, as per language that was included in Maryland's annual budget law earlier this year.

“Maryland is currently surrounded by a majority of the iGaming states in the country, with the exception of Virginia and the District of Columbia,” said Brendan Bussmann, managing partner with B Global in Las Vegas.

“It’s logical that this would be the next progression in gaming,” Bussman said. “There is a Maryland customer they are not capturing today but you are also limiting convenience to the consumer.”

The Innovation Group’s 49-page report lays out the current regulatory landscape for online gambling, as well as the estimated size of the market. 

Watson noted the report did not include revenue from any initial license fees, “but I expect them to be in line with Pennsylvania and New Jersey at around $400,000.” 

A bill authored by Watson earlier this year proposing a 2024 voter referendum on iGaming failed to pass the Maryland Senate before the March 20 deadline, but the measure carries over into next year’s session and will still be on the table once lawmakers return to Annapolis.

Watson told Vixio on Thursday that he expects “some form of a bill to emerge” during the 2024 legislative session. Maryland’s legislative session starts on January 10 and adjourns on April 8. 

He described BetMGM co-owner MGM Resorts International as “very supportive” of his efforts “to help craft something that will allow us to tap into this new and important revenue stream.”

Requests for comment from Maryland casino operators MGM, Caesars Entertainment and Cordish Cos. were not returned.

“As we saw with sports betting, the voters will have to approve iGaming and has been he case with other expansions of gaming,” Bussmann told Vixio. “I don’t see voter fatigue on gaming right now, but it is all contingent on what that potential language looks like."

Bussmann warned that if the ballot language is it’s complex, it could make it challenging.

“If you run a poor campaign as we have seen in other states with gaming initiatives, you’re likely dead on arrival,” he added. “You always have one good bite at the apple on these things and then they get complex.”

Bussmann said the stars are tending to align as you are headed into a high turnout, presidential year that offers a different voter typically than you saw in the previous election cycle.

“However, it’s up to the race that is run,” Bussmann said. “With the legislature putting the measure on the ballot and putting trust in the voters that elected them, there is good likelihood that this passes on the ballot.”

Watson admitted that “many are concerned” about the impact iGaming would have on problem gambling rates in Maryland, but he stressed that the “use of technology provides many tools to help [with] this issue.”

Among the problem gambling measures technology allows operators to use is the ability to monitor betting amounts, the ability to temporarily freeze accounts and provide a "cooling-off period," and the ability to have a real human contact the individual using the number used to set up the account to provide real-time support.