Maryland mulls igaming future with legalization study

Officials from the Maryland Lottery and Gaming Control Agency (MLGCA) have begun an inquiry into the impact of online gambling legalization in the Free State as part of its fiscal year 2024 budget.

Although commissioned to do so under the budget, the study is to be carried out by an external third-party entity, with requests for proposals (RFPs) issued earlier this month to prospective third-party research bodies.

Central to the study is the evaluation of the prospective market, including the provision of market size estimates, and the impact from igaming’s legalization on both land-based operators and the state’s own lottery system.

The third-party research firm will also examine results from other states which have legalized igaming and conduct a detailed analysis of igaming’s potential impact on problem gambling rates in the state.

Under the budget’s parameters, the MLGCA will have until November 15 to submit its report to the legislature.

The move to conduct a study into igaming follows the introduction of Senate bill 267 into the Maryland legislature in January.

Authored by Senators Ron Watson and Nancy King, the “Internet Gaming Authorization and Implementation Act” would have given the MLGCA powers to authorize igaming in the state, introducing a licensing system for the vertical.

Land-based and online operators would have been eligible for licenses and taxed at a rate of 15% of their annual gross gaming revenue (GGR), with taxation revenue paid to Maryland’s Education Trust Fund, which works to advance educational causes in the state.

The legislation would have seen the issue put to a statewide referendum, as provided for under the Maryland constitution. However, SB 267 failed to be heard in the 2023 legislative session, which ended on April 10.

It is understood that Senators Watson and King plan to reintroduce the legislation at the next legislative session, which begins on January 10, 2024, after the research has been concluded and could potentially give it a better chance of passing through both chambers.

Maryland legalized sports betting in May 2021, launching online in November 2022.

In May, the state’s retail and mobile sportsbook operators reported a combined handle of $320.1m, made up of $305.1m in online handle and $15m in retail handle.

Authorities collected $4.6m in total taxable revenue from both online and retail operators, the second-highest total tax collected this year, just behind March’s total of $5.3m.

On a year-to-date basis, Maryland handle has reached $2.63bn, made up of $2.4bn in online handle and $235m in retail handle over the same period.