Senate Opposition Kills Maryland Internet Gaming Bill For 2024

April 8, 2024
The Maryland General Assembly advanced a budget deal ahead of the last day of the session on Monday that included $340m in new taxes and fees but did not include any revenue from online gaming as the Senate opted to forego considering any gaming expansion.

The Maryland General Assembly advanced a budget deal ahead of the last day of the session on Monday (April 8) that included $340m in new taxes and fees but did not include any revenue from online gaming as the Senate opted to forego considering any gaming expansion.

Maryland's House of Delegates passed House Bill 1319 to authorize online gaming by a vote of 92-43 largely along party lines on March 16, clearing the three-fifth majority needed to pass a state constitutional amendment.

Delegate Vanessa Atterbeary, a Democrat, who sponsored HB 1319, saw her measure assigned to the Senate Budget and Taxation Committee but after a March 26 hearing committee members did not vote to advance the measure, effectively sidelining her proposal for this year.

Maryland senators have been vocal in their opposition to legislation authorizing online casino gaming. Senate President Bill Ferguson, a Democrat, told Maryland Matters following the passage of HB 1319 in the House that it was not among the bills they were going to take up this year.

Senator Ron Watson, a Democrat, introduced two bills to legalize iGaming in Maryland, but other than one hearing in the Senate and Taxation Committee, his measures went nowhere.

Watson introduced Senate Bill 603 to regulate and tax iGaming and accompanying referendum bill Senate Bill 565.

Lawmakers could still approve a referendum to put the question of legalizing iGaming in front of voters in November, but that is highly unlikely before the legislature adjourns on Monday.

Rhode Island last month became the seventh state to offer internet casino gambling joining New Jersey, Connecticut, Delaware, Pennsylvania, Michigan and West Virginia. Nevada offers internet poker but not online casino games.

Measures to legalize iGaming in New York and Illinois are also going nowhere fast this session.

In Illinois, House Bill 2239 was removed from last week’s House Gaming Committee meeting with supporters acknowledging that iGaming is unlikely to pass this year amid ongoing opposition from operators of video gaming terminals in bars and other retail locations.

In New York, Senator Joseph Addabbo, has acknowledged that his iGaming legislation was going nowhere unless there is support from Democrat Governor Kathy Hochul, who left iGaming out of her 2025 budget proposal.

The lack of legislative support for iGaming remains a headscratcher given impressive revenue numbers being reported in New Jersey, Michigan and Pennsylvania in particular. 

“Education remains one of the main focuses of iGaming,” said Brendan Bussmann, managing partner of B Global Advisors in Las Vegas.

“It’s a different form of entertainment that legislators and regulators are not as familiar with and that takes time to educate them on the benefits as well as the right tax rate.

“Some of the blue states that are drunk on spending are going to hit a point as we are starting to see where they need the additional revenue, iGaming will be one of those opportunities,” added Bussmann. “But it needs to be about setting up the right environment.

“One of the other challenges is the subterfuge that keeps coming up on cannibalization, which does not exist,” Bussmann said. “It’s why the education piece is so important to refute."

Atterbeary’s bill was amended in the Maryland House several times before it was passed as she tried to gain additional support for the measure. Among the amendments was the creation of an employee displacement fund to assist any brick-and-mortar employees who may be laid off due to legal iGaming.

Atterbeary’s bill would have allowed a total of 30 licenses available to the state's six land-based casinos and so-called Class B sports wagering facility licenses, including off-track betting outlets and charitable bingo halls.

The state’s six brick-and-mortar casinos would be entitled to between one and three licenses, depending on the extent of their partnerships with a minority partner.

But not all casinos were supportive of Atterbeary’s bill, and labor unions were opposed over concerns iGaming would cannibalize the land-based business and lead to significant job losses.

Maryland Live!, which is owned by Baltimore-based Cordish Cos., and Churchill Downs' Ocean Downs Casino are also opposed to online casino gaming.

Ryan Eller, executive vice president and general manager of Maryland Live! casino near Baltimore, expressed the company's concerns last month at an iGaming Town Hall hosted by Morgan State University. 

“Cannibalization is certainly a concern for our brick-and-mortar casino operators,” Eller said. “Certainly, for me. I do expect that you will see double digit declines and cannibalization of revenue.”

Eller was unavailable for comment Friday.

Atterbeary’s proposed bill would have taxed iGaming revenue from live dealer casino games at up to 20 percent, while all other iGaming offerings would be taxed at a maximum rate of 55 percent, with rates to be determined through the license application process.

Each five-year license would have cost $1m, with a renewal fee equal to 1 percent of revenue for the preceding three years.  

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