More and more states around the country are legalizing sports betting, with visions of millions of dollars pouring into state and local government coffers. That’s especially true now that revenues have slowed because of the COVID-19 pandemic, and many local governments are staring at shortfalls.
Betting has been legalized in D.C.; voters in Maryland are in the process of deciding the question, and gaming companies are putting in their applications in Virginia.
But will it work? And how? And for whom?
This week, WTOP’s series “Betting on the Future: A look at sports betting in the DMV” is assessing the state of gambling in each area jurisdiction.
There are many reasons why the gaming industry sees growth in the DMV as a sure bet: a large and growing population that comes from many different places, which means they’re fans of numerous professional and major college teams.
And much of the population has the “disposable income that folks like to spend on sports entertainment products,” said Cory Fox, a vice president for government affairs with the gaming company FanDuel. The company has invested $500,000 in getting Question 2, which would legalize sports betting in Maryland, passed.
Maryland was the first state to welcome gambling to the DMV — voters approved a referendum to legalize slot machine gaming in 2008 and another for table gaming in 2012.
Fox said polling conducted on behalf of FanDuel has the company optimistic that Question 2 will pass, too. He said the issue isn’t getting much attention because of the presidential race, but that polling shows support in the 55-60% range.
Unlike in years past, there isn’t much of an opposition campaign against expanding sports betting this year. Gov. Larry Hogan, a Republican, has endorsed the measure, as have Democrats in places such as Montgomery County, all of whom are aware that gambling brings in hundreds of millions of dollars to education at a time when budget writers are getting nervous about drops in other revenue streams because of the pandemic.
In all likelihood, the real fight will be over the guidelines and rules that will guide sports betting in Maryland.
Who gets to play?
“We’re looking to ensure that your casinos, your race tracks have the opportunity to have sportsbooks at the facilities,” said state Sen. Craig Zucker, a Democrat from Montgomery County who was behind a push earlier this year to legalize sports betting statewide in Annapolis.
Zucker said those venues should also be able to take bets through a mobile app.
“We want to make sure that there’s competition and ultimately that raises revenue for the state of Maryland.”
That last part is where it got complicated during the 2020 legislative session, which was cut short because of the pandemic.
“Sports betting is a big part of creating opportunities here in the state of Maryland,” said Prince George’s County Del. Darryl Barnes, who chairs the Legislative Black Caucus. “Here’s another multibillion dollar opportunity in which the Black caucus has taken the lead to have conversations centered around equity and inclusion, meaning that there needs to be some form of ownership for minorities, i.e. Black people.
That is the No. 1 fight that the caucus is having,” said Barnes.
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The six casinos operating in Maryland will get sportsbooks; some in the legislature, however, think there should be more.
Baltimore City Del. Nick Mosby, who is expected to be elected the new chairman of the Baltimore City Council next month, envisioned betting operations working similar to restaurants at race tracks, or shoe stores and spas inside casinos — establishments that operate in coordination with, but also independent from, the rest of the structures there.
“The actual box, the big box, doesn’t own these separate entities inside of it,” said Mosby. “We can look at sports betting licenses the same way. It could be partnerships; it could be sole-proprietor ownerships, but it doesn’t necessarily have to go to the owner of the big box.”
So, how does the Black caucus see it working?
“There would be a competitive bidding process, similar to the lessons we’ve learned from medical cannabis,” Barnes said. “Ensuring that there is a score system that would give points for disadvantaged businesses in certain areas and so on and so forth.
I think if we look at it from that model, and then looking at it from [a minority business enterprise] standpoint in the state of Maryland, I think it then opens it up where folks have opportunity,” he added.
“We know that there’s issues with minority participation in many of our larger industries,” added Mosby. “When you create a new license, clearly there should be a focus on ensuring we have the most inclusivity and provide the most opportunities, and you open it up for the entire state.”
Where do casinos fit in?
Analysts and consultants with deep ties in the gaming industry say competition is good, but the state’s casinos should be in the mix after scrutiny last year.
“These are your partners in your state,” said Sara Slane, a consultant and strategist in the gaming industry. “They’ve made substantial investments in the state of Maryland. MGM — over a billion dollars into Prince George’s County. They’re good partners and they should be rewarded for that.”
Slane said other states that are seeing the sort of successes Maryland aspires to also go beyond that, with more options than just what is run by the casinos and race tracks that exist.
“It’s striking the right balance of not oversaturating the market, but … rewarding those incumbent interests in the state that have made investments and that they need to continue to compete with neighboring states that have the same offerings.”
Slane said it would be too shortsighted for Maryland to look only at the competition among would-be operators for those licenses.
“It really is a competition among the states” that neighbor Maryland, said Slane.
State regulators are going to need to “put together the most compelling package possible for you to drive the most dollars back to the state. And that’s not going to come through a high tax rate; that’s not going to come through a monopoly, and it’s not going to come through a slow regulatory process either.”
Those are all things the D.C. government has been criticized for within the gaming industry, and where Virginia has been drawing praise as the commonwealth gets ready to roll out sports betting in the coming months.
Do it right and the payoff could be enormous.
“We expect the minimum to be about $20 million [a year], but it could be upward of $40 million,” said Zucker, when asked how much he thinks Maryland will collect from sports betting.