House Passes Maryland Online Gaming and Poker Bill

Poker players and iGaming enthusiasts in Maryland were handed a major opportunity last month, as the state’s House of Representatives voted 92-43 to advance an online gaming and poker legalization bill. The affirmative tally crossed a crucial threshold, enabling the issue to be put before voters via a November referendum that will also include reproductive rights.

Democratic Representative Vanessa Atterbeary, the chief sponsor of House Bill 1319, initially introduced the legislation in February. With time running short ahead of the legislature’s crossover day deadline on March 20th, the online gambling proposal narrowly cleared its first major hurdle. It now heads to the Maryland Senate for a vote and potential amendments.

The House approval of the Maryland measure comes just two months after the Virginia Senate’s Subcommittee on Resources unanimously voted 4-0 to delay discussion of their casino bill until 2025. Unlike Michigan’s, this legislation seeks to create a land-based casino in Northern Virginia.

Fiscal Implications

Driving momentum for the bill were nonpartisan estimates projecting that legalizing online gaming could generate $300 million annually in tax revenues for Maryland. Those funds could be critical to offsetting the state government’s current $1.1 billion budget shortfall.

The House committee outlined a budget plan of $1.3 billion in mid-March that depends largely on expanded taxation, increased toll fees, and gaming revenue from legalized online gambling. As reported by AP News, the added revenue would help support the state’s upcoming education and transportation initiatives.

Atterbeary emphasized that the focus is on generating revenue for the state during the lead-up to last month’s floor vote. She highlighted the strict regulations, transparency, and the potential to generate funds for crucial areas such as education and revitalization projects.

Concessions, Deal-Making, and Amendments

Of course, the 92-43 tally came amid last-minute legislative deal-making and amendments to the bill’s licensing procedures. Most notably, Atterbeary’s legislation now includes a tiered system governing how the state’s existing six casinos can qualify for online gaming licenses:

To obtain an initial license, casinos must form partnerships, allocating 5 percent of associated online revenue to a social equity applicant. That applicant is an entity controlled by historically disadvantaged demographic groups, such as minorities and individuals with disabilities.

Casinos meeting the 5 percent social equity threshold would then be eligible for a second license that bumps the revenue sharing to 33 percent. With the 5 percent and 33 percent partnership criteria satisfied, casinos could pursue a third online gaming license.

The amended bill also made allowances for other gambling businesses in Maryland. Four off-track betting facilities and two bingo halls would become eligible to apply for online poker or iGaming licenses, bringing the statewide total of potential licensees to 18.

One notable caveat drawing criticism is a provision expressly prohibiting the use of credit cards to fund online casino accounts, despite being allowed in the $4-billion sports betting market. This discrepancy, which a companion Senate bill omits, may factor into future revisions.

Maryland Commercial Casinos Respond

For their part, existing casino operators in Maryland reserve full-throated judgment on the House bill’s impact and will likely lobby for revisions in the Senate. 

MGM National Harbor, which plans to host the Price Is Right game show this fall, has already voiced concerns. The Fort Washington casino said tiered 5%- 33% revenue sharing for social equity applicants’ amounts to an unsustainable business model if it hopes to compete meaningfully in the digital market.

Industry analysts have noted that if implemented, the 55% tax rate on online electronic games and 20% on live dealer tables would rank among the highest nationwide. While ostensibly designed to fund education and community development programs, such rates could hamper Maryland’s competitiveness relative to other regional online gambling markets.

The iGaming Bill Faces Organized Opposition

Further complicating matters is the organized opposition from both casino worker unions and Republican legislators. These interests have already begun sounding alarms over the potential job losses that could result should brick-and-mortar establishments lose businesses and clientele to online gambling competitors.

A joint statement from GOP members cautioned that the emergence of the iGaming industry will undermine Maryland’s casinos and result in the displacement of numerous hard-working Americans from well-paying jobs. They added that it would introduce predatory advertising that has the potential to trap countless Marylandians into addictive gambling practices.

HB 1319 Failed to Pass

Despite clearing a major hurdle with the House’s 92-43 passage, HB 1319 ultimately failed to cross the finish line in the 2024 Maryland legislative session. The Senate never brought the online gaming and poker legalization bill up for a vote before the General Assembly’s scheduled April 8th adjournment.

The failure to pass came as little surprise. The news comes weeks after a former casino dealer in Iowa was fined $11,000 restitution for repeat cheating.

Senate President Bill Ferguson had repeatedly voiced skepticism over rushing into expanded online gambling without proper regulatory frameworks in place. He cited Maryland’s sluggish, two-year rollout of mobile sports betting after its 2020 legalization as a cautionary tale of enacting inadequate minority participation rules.

Ferguson found an ally in opposition from State Senator Guy Guzzone, who stated bluntly that 2024 was not the best time for the state to entertain a gaming industry expansion. Their reluctance helped seal the bill’s fate.

Delegate Vanessa Atterbeary, HB 1319’s lead sponsor, remained undeterred despite the Senate’s inaction. Speaking at a Budget and Taxation Committee hearing, she doubled down on her position that regulating and taxing the currently underground online gaming market was the right move.

Wrapping Up

In the interim, Atterbeary is expected to regroup with stakeholders from both sides of the debate. Refining their proposal with more robust problem gambling funding and worker protections, as well as revisiting the tax rate and license fee structures, could help sway recalcitrant Senators.

However, in a state where online sports betting requires over two years to implement once legalized, mobilizing the political willpower to authorize a new gambling vertical is proving enormously challenging. HB 1319’s failure underscores the complex patchwork of interests and opposition that any future Maryland online gaming legalization push must navigate.

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