Maryland Sports Betting Regulatory Draft Released, Public Comment Period to Come

Posted on: July 15, 2021, 02:55h. 

Last updated on: July 15, 2021, 03:10h.

Maryland sports betting licensing fees and associated taxes were proposed today by the Maryland Lottery and Gaming Control Commission.

Maryland sports betting regulations
Testudo, the University of Maryland mascot, waves the state flag at a basketball game. Legal sports betting is coming soon to the state, and odds on the Terps will be included. (Image: University of Maryland)

Maryland Gov. Larry Hogan (R) signed House Bill 940 — a measure to legalize and regulate sports betting — in May. The shell bill tasked the state lottery and casino regulatory commission to develop specific rules, including licensing procedures and associated costs, for the expanded gaming.

As many as 60 mobile operating privileges are set to be authorized, the most of any state with legal, regulated sports betting. 

Gross gaming revenue derived from retail and online sports betting will be taxed at 15 percent, the proceeds allocated for K-12 education. The state believes that upon market maturity, sports betting will generate between $15 million to $19 million annually for the Education Trust Fund.

Licensing Details, Costs

HB940 created numerous types of sports betting licenses, the goal being to allow various entities to participate. 

Maryland’s three professional sports stadiums — Oriole Park at Camden Yards, home of the MLB Orioles, FedEx Field, home of the NFL Washington Football Team, and M&T Bank Stadium, home of the NFL Ravens — all qualify for a Class A-1 license. Casinos with more than 1,000 slot machines do, too. Class A-1 sports betting licenses cost $2 million upfront, plus a $6 million licensing bond. Maryland is using a bond structure to make sure licensees comply with all applicable laws and regulations. 

Casinos with fewer than 1,000 slots, plus the Laurel Park and Pimlico horse racetracks, qualify for Class A-2 licenses. They cost $1 million upfront with a $3 million bond. 

Class B-1 licenses are set aside for the Maryland State Fairgrounds, and any commercial bingo center that is able to pony up a $250,000 licensing fee and post a $750,000 bond. 

Class B-2 permits are available for small businesses that have at least 25 full-time employees or $3 million in annual gross sales. Such licenses cost $50,000, plus a $75,000 bond. 

Finally, mobile licensees can partner with any of the above permit holders, but at a steep cost. Fully online sportsbooks must pay $500,000 to the state, and present a $1.5 million bond. 

Each license is good for three years. Renewal prices will be set at one percent of the licensee’s average sports betting gross gaming revenue incurred over the previous 36 months. 

Public Comment Period

The Maryland Lottery and Gaming Control Commission says a 30-day public comment period will initiate once the sports betting regulations are published in the Maryland Register. The agency explains that it will confirm the exact comment period dates once confirmed.

One area of possible contention is that Maryland lawmakers sought to allow mom and pop shops to participate in sports betting. But at $50,000 upfront, and a $75,000 bond guarantee, those Class B-2 costs might turn away many small, locally-owned businesses. 

Such small businesses would partner with third-party contractors, such as DraftKings, to install self-service kiosks inside their establishments.