Maryland’s Path to Legalized Sports and Event Wagering in 2021

January 4, 2021Alerts

In the November election, Maryland voters overwhelmingly approved Ballot Question 2 — the Maryland Commercial Gaming Expansion Referendum — authorizing sports and event betting. As a result, Maryland joins the growing list of states across the nation that are legalizing and regulating sports betting. Maryland’s legislative agenda, as well as recent commentary from Maryland legislators and gaming regulators, suggests that sports and event betting may be up and running in Maryland by the summer of 2021.

Under Article XIX of the Maryland Constitution, the Maryland General Assembly may only authorize additional forms or expansion of commercial gaming if voters have already granted approval through a referendum. Commercial gaming through the operation of video lottery terminals at multiple locations within the state was approved through a November 2008 referendum, and per the recent referendum, the Maryland General Assembly has the green light to legalize sports and event betting.

More specifically, the referendum provides that the General Assembly may enact a law authorizing the Maryland State Lottery and Gaming Control Commission (Commission) to issue certain sports and event wagering licenses. Such legislation must include criteria for eligible applications for a licensee and specifications of the permissible forms, means of conduct and premises of wagering, and must otherwise provide for the operation, regulation and disposition of proceeds of sports and event wagering in the state.

Past efforts in the Maryland General Assembly — including in both the Maryland Senate, House of Delegates and support from Governor Larry Hogan — suggest that legislation will be enacted sooner rather than later. The referendum was authorized pursuant to Senate Bill 4, and an earlier iteration of Senate Bill 4, which unanimously passed in the Maryland Senate, provides an initial framework and guide for what the legislation could look like. While the House of Delegates also passed Senate Bill 4, the COVID-19 pandemic cut the General Assembly’s session short and the final version of Senate Bill 4 passed by the House of Delegates did not include specifics on how sports wagering would be conducted and regulated.

Senate Bill 4, as passed by the Maryland Senate, would have authorized sports wagering at certain sports, horse racing and video lottery facilities and permitted internet and mobile sports wagering. The Commission would have been empowered to issue sports wagering licenses to video lottery operators, horse racing licensees and the owners of applicable sports facilities, and also to issue licenses to sports wagering operators, including “online sports wagering operators,” to conduct sports wagering on behalf of sports wagering licensees. Sports wagering licensees would have been limited to contracting with one online sports wagering operator to conduct online sports wagering on its behalf (i.e. one skin). Further, the Commission would have been charged with issuing licenses to persons managing, operating, supplying or providing services related to sports wagering equipment and devices. Similar to existing commercial gaming in the state, the Maryland State Lottery and Gaming Control Agency (MLGCA) would be responsible for assisting the Commission in regulating sports wagering within the state. In short, while the Maryland Senate and House of Delegates will need to put forth new bills in the 2021 legislative session, Senate Bill 4 provides a glimpse at where the General Assembly may be headed.

Maryland’s 2021 legislative session begins the second week of January and concludes the second week of April. Sen. Craig Zucker, a leading proponent of Senate Bill 4, has indicated the General Assembly’s goal is to pass sports wagering legislation during the 2021 session, with sports wagering up and running by summer 2021. Assuming the legislation is signed by Governor Hogan, it would become effective on July 1, 2021. Gordon Medenica, the Director of the MLGCA, has indicated that the MLGCA has already started working on sports wagering regulations, which should help support Maryland’s target of a summer 2021 launch.

If you have any questions about this alert, please contact C.J. Fisher at 609.572.2209 or [email protected], Scott Leopold at 609.572.2290 or [email protected] or any member of the firm’s national Gaming Law Practice.

This alert was featured by IAGA as an Expert Insights column.