Maryland iGaming bill gets committee hearing

Posted on: February 23, 2024, 8:56 am.

Last updated on: February 23, 2024, 9:16 am.

Maryland’s iGaming legislation is scheduled to be heard in the state Senate next week. The consideration of online casino gambling comes at a time when gaming operations continue to decline at the state’s six brick-and-mortar commercial casinos.

iGaming casino revenue in Maryland
The exterior of Horseshoe Baltimore, one of six casinos in Maryland. The Horseshoe and five other brick-and-mortar casinos saw slot and table game winnings slow in 2023. The decline comes as state lawmakers consider approving iGaming. (Picture: The Baltimore Sun)

State Senator Ron Watson (D-Prince George) introduced Senate Bill 603 in late January. The measure aims to give the state’s six casinos the ability to partner with up to two online casino operators each.

SB 603 would require a $1 million upfront fee from approved online casino platforms. Gross gaming revenue from interactive slots and table games would be subject to a 47% tax.

Watson and other online gambling advocates say iGaming would bring the state an estimated $300 million a year in new tax revenue. They also claim that consumers want the convenience of playing casino games from the comfort of their own home.

SB 603 is scheduled to be heard in the Senate Budget and Taxation Committee next Wednesday, February 28th. If the bill passes all chambers and is signed by Gov. Wes Moore (D), Marylanders would have the final say on iGaming in the November election.

Marylanders can currently legally bet online through a regulated sportsbook. No casino slots or tables are allowed on such apps and websites.

Bad timing?

A recent study concluded that iGaming has no negative impact on physical casinos. The researchers said online casinos complement land-based casinos and “help drive revenue from operators’ brick-and-mortar casinos.”

Whether that’s true is debatable.

Casinos in Pennsylvania and New Jersey saw modest brick-and-mortar revenue increases of 1.6% and 2.2%, respectively, last year. Meanwhile, iGaming rose 28% and 16% in these states, respectively.

In Michigan, another state with iGaming and in-person casinos, the numbers told a different story. Gaming winnings at the three casinos in Detroit — the only place where commercial casinos operate in Michigan — fell nearly 3% last year. Online casinos, meanwhile, saw revenue increase by over 15%.

Of course, there are no online slots and table games in Maryland, yet in-person gaming at state casinos has declined by more than 3% over the past year. MGM National Harbor at Oxon Hill, Live! in Hanover, Horseshoe Baltimore, Ocean Downs in Berlin, Hollywood Perryville and Rocky Gap in Flintstone won $68.5 million less than in 2022.

In January, the revenue decline continued as the six casinos reported an 8% year-over-year decline in casino profits.

Union leaders representing the more than 15,000 workers at the six casinos oppose iGaming, fearing such an expansion of gaming offerings would lead to layoffs. Tracy Lingo, president of the Unite Here Local 7 union, says allowing people to stay home to gamble means there will be less need for bartenders, servers, cooks, housekeepers, vendors, slot machines, security guards, hosts and other positions .

iGaming “Big Enchilada”

Watson tells iGaming opponents that the state needs more revenue.

“We have to increase revenue or reduce expenses. iGaming is the last piece of the four-legged stool when it comes to casinos and gaming. We need to be able to generate that revenue,” Watson said.

iGaming is truly the big enchilada,” the lawmaker explained.

In addition to job problems and loss of casino revenue, opponents have also raised concerns about gambling addiction. Watson said the iGaming industry has appropriate protocols in place to address problematic gaming, including operator-initiated cooling off periods and third-party contact support.

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