Maryland lawmakers will consider online casino legislation again

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A bill to legalize Maryland online casinos via a voter referendum is back for another tour after failing to advance last year.

Maryland State Sen. Ron Watson’s 2023 effort to bring online casinos to the state has carried over into 2024. In 2023, the bill was SB267, while this year it was filed as SB603.

The updated bill language would allow state casinos and VLT operators to offer online casinos. There would also be five additional licenses available to companies that have been headquartered in Maryland for at least 10 years and own at least a 5% interest in a VLT operator. If selected for a license, these operators would need to commit to building a $5 million live dealer studio within the state.

Licensees will pay $1 million for a five-year license. Operators will be taxed 47% of adjusted gaming revenue. For the first year, operators can deduct 100% of promotional credit. After the first year, those deductions can only be 20% of promotional spend.

One percent of both the license fee and taxes will go toward the state’s fund for problem gambling.

In addition to passing SB603, lawmakers would also have to greenlight SB565, which would allow for the question of online casinos to be taken to the voters. In the current draft, the question on the ballot would read:

“Do you favor the expansion of commercial gaming in the State of Maryland to authorize Internet gaming for the primary purpose of raising revenue for education?”

There are cannibalization concerns that expansion could have a negative impact on the bottom line of VLT parlors and casinos in the state. Maryland Lottery & Gaming Control commissioned a study from The Innovation Group on the economic impact of online casinos.

The group presented the study to the House Ways and Means Committee earlier this month and said the potential cannibalization effect of online gaming was minimal, but it was nonetheless a topic that remained top of mind amongst legislators during the discussion.