Supported by Adrienne Jones, House Bill 940 was heard in the House on Thursday this week. The bill proposes the regulation and taxation of in-person and online sports betting in Maryland.
Maryland’s Legislature Debates on HB 940
Last year, Maryland voters voted in favor of gambling expansion, allowing sports betting at certain licensed facilities. On the ballot in November last year, 66.2% of the voters approved the gambling expansion in the state. It is expected the raised tax revenue to be used primarily for public education funding.
Now, in the middle of the General Assembly session, Maryland’s legislature is still debating the sports betting expansion. So far, House Bill 940, which is sponsored by House Speaker Adrienne A. Jones, seems to have every prospect of success. On the other hand, the Senate is yet to introduce a bill with specific details regarding the gambling expansion in the state. Furthermore, there is also no timeline set as to when the Senate may introduce such bill.
The bill was heard at a two-hour hearing this week Thursday. Following the debate, the next move is for the House to set a date to vote on the proposal. However, before that, both the House and the Ways and Means Committee would have to discuss the proposal.
Taxes to Fund the State’s Education
Sponsored by Jones, HB 940 proposes the establishment of in-person sports betting at the state’s six casinos. Additionally, in-person betting would also be offered at two horse racetracks. On the other hand, the bill proposes up to 10 licenses for online sports betting. If the bill is approved, sports betting would be available both via mobile apps and websites.
In its current version, the bill proposes a 15% tax on sports betting in the state. As noted, it is expected that revenue to go toward funding education in the state. Furthermore, HB 940 estimates that the taxation may bring approximately $16 million for the state’s education yearly.
Licenses to Be Valid for 5 Years
Under the current proposal, operators who would like to offer sports betting would need to apply for a license. Furthermore, an application fee is also applicable for each operator which needs to be paid to the State Lottery and Gaming Control Commission. The proposal calls for a $250,000 application fee for a Class A license and a $50,000 fee for a Class B license. Furthermore, the proposal calls for a fee of $500,000 for mobile sports betting license.
HB 940 proposes each license to be valid for five years. Furthermore, upon renewing their license, operators would pay a 1% fee on their average sports betting gross revenues for the last 5 years, excluding the taxes.
Regulated Sports Betting in Maryland to Bring Benefits
Besides big market players, smaller companies have also shown interest in joining the regulated market in Maryland. This is undoubtedly going to be one of the challenges which the state’s legislature is going to face. The lawmakers would have to find a way to regulate the market while allowing enough competition. Furthermore, considering that many operators may be interested to launch their services, the number of licenses would have to be sufficient.
Previously, the Maryland Lottery and Gaming Commission has revealed a report which outlined that the illegal sports betting market in the state is estimated at around $2.7 billion annually. However, once the sports betting market is regulated, undoubtedly, the funds which leak toward black markets are going to significantly decrease.