Senator Talks About Introducing First Maryland Online Casino Bill

Now that Maryland finally has online sports betting, lawmakers are ready to explore the possibility of legalizing Maryland online casino play as well.

Sens. Ron Watson and Nancy King introduced SB 267 on Wednesday. The bill could authorize online games offered by Maryland’s six video lottery facility operators.

Watson explained his reason for introducing the bill to Playin USA:

“Especially now that folks have started to see the revenue we can get from sports betting, I think we’re past the point of hesitation and we’ve realized that casinos are so valuable to our economy here in Maryland. If we had to endure another pandemic and sports shut down, we would have zero money generated from our existing casinos and that would be a shame. But if we can put in place online gaming, we’ll have another revenue stream that can fund our aggressive efforts to improve our education system in Maryland.”

It’s the first attempt to legalize this form of online gambling in Maryland. But this is just the beginning of a long road for the legis
lation.

Watson said he checked with Maryland’s Attorney General office and was told online casino is an expansion of gaming in Maryland. The Maryland constitution requires any expansion of commercial gambling to get approval from voters.

So after receiving a two-thirds vote in each legislative chamber, the question of authorizing Maryland online casino would need to go in front of voters in the November 2024 general election.

Details of this Maryland online casino bill

Here are some of the key details from the 10-page bill to allow video lottery operators to conduct internet gaming:

• Assigns the State Lottery and Gaming Commission to regulate online casino.
• Sets an initial license fee at $500,000 for five years.
• Adds a license renewal fee equal to 1% of the average annual proceeds from the previous three years.
• Taxes online casino revenue at 15%.
• Allows operators to deduct free play and promotional credits from revenue before paying taxes.
• State tax revenue minus regulatory expenses goes to the Education Trust Fund.
• Allows the governor to enter into multijurisdictional gaming agreements if legal federally.

“This is the current design,” Watson said. “I looked at other states to try to come up with a framework our bill drafters could codify. Because we have two years to get this out, we have a lot of flexibility on what the final product would look like.”

Maryland casinos that could benefit

Here’s the six Maryland casinos, referred to as video lottery facilities, that could take part in iGaming if the bill passes:

• MGM National Harbor
• Horseshoe Casino
• Live! Casino and Hotel
• Ocean Downs
• Rocky Gap Casino Resort
• Hollywood Casino

Each casino began offering retail sports betting late in 2021. A year later, online sportsbooks launched in Maryland.

Online poker a priority for Maryland senator

Watson said it has been a goal of his to introduce online casino legislation since he entered the legislature, first as a state representative in 2019.

He played on PartyPoker and PokerStars prior to Black Friday. He’s sat down at a table with or taken lessons from poker greats such as Phil Hellmuth, Doyle Brunson and Annie Duke.

“I love casinos but I am a long-time poker player,” Watson said. “When I say I’m into poker, I’m really into poker. I played at the World Series of Poker, not the big game but some of the smaller events. I’m glad to take the lead on this having played poker for so many years.”

The bill doesn’t specifically mention online poker, but Watson figures it counts under “casino-style games.” It was important to Watson to include multijurisdictional compacts in the bill to create liquidity for a Maryland online poker market.

Watson said he has a ton of friends who still play online on the PokerStars free application. They just agree to payouts ahead of time and then PayPal or Venmo each other after playing. He figures there are many others in Maryland doing so as well.

“People are already playing online, so why not legalize and regulate it?” Watson said.

Responsible gambling provisions

Although the bill is only 10 pages, it does seek to mitigate problem gambling.

Here are some of the measures included to address problem gambling:

• Prohibits licensees from advertising to individuals who are prohibited from participating in gambling activities and other at-risk individuals.
• Requires that a problem gambling hotline be displayed when users log in and out of their accounts.
• Requires that users have a mechanism to limit the amount of money deposited within a specific time period and temporarily suspend their internet gaming activity for any length of time.
• On or before Sept. 1 of each year, the State Lottery and Gaming Commission must report to the governor and General Assembly on the impact of internet gaming on problem gamblers and gambling addiction in the state.

Minority inclusion will be a consideration in Maryland

When sports betting legislation was first filed in Maryland, it was limited to physical gaming properties in the state.

When the discussion on the legislation became serious in the second year, including minority-owned businesses became paramount.

Watson said he limited the bill to casinos because of their readiness in the industry and concern that small minority businesses get such a small amount as middlemen to large online gaming operators. But he plans to work with colleagues in the black legislative caucus to figure out how to make a carveout so that others in the community benefit from online casino.

“I’m a member of the legislative black caucus, the largest legislative black caucus in the country,” Watson said. “Through that black caucus, we made sure minorities were represented in sports betting. So this would be no different. I would work with other colleagues in the black caucus in the Senate and House to figure out the most equitable way to do this so everybody can profit.”

Two-year process for Maryland online casino efforts

Essentially, this is an introductory year for the Maryland online casino legislation. Watson said he is not expecting passage this year but hopes for passage next year.

“I’m very confident that we’ll have something that we can pass by next year. We have plenty of time to work it out. In some cases like this we may form a summer study group to hammer out the details, but I’m pretty sure we’ll have something next year ready to roll.”

The bill was referred to the Senate Committee on Budget and Taxation to begin its journey.

Given that the issue would need to go in front of voters in November 2024, passing the bill next year is the same as passing it this year. Maryland’s legislative session ends April 10.

If the legislature does pass the bill, it includes the following ballot question to go in front of voters:

“Do you favor the expansion of commercial gaming in the State of Maryland to authorize Internet gaming for the primary purpose of raising revenue for education?”

Watson hopes to get support from newly elected Gov. Wes Moore, the third black governor ever elected in the US.

“He’s very open to new forms of revenue streams, so I look forward to working with him to see if we can make this bill a reality,” Watson said. “It will benefit not just poker players but those who can’t afford to go to a casino and would love to sit in the privacy of their own house and play some of these games.”