Last year, the Maryland Senate was where hopes to legalize online casinos died. This year, it was the site of an inauspicious start for the 2025 effort to pass Sen. Ron Watson’s online casino proposal, SB2340.
This year is a return effort for Watson. The bill, which would trigger a voter referendum, would allow sports betting operators, gaming companies with a longstanding presence in Maryland and VLT operators with a minority business entity (MBE) partner to offer online casino games, including live dealer if its studio is located in the state.
Online casino bill features 55% tax rate, minority biz participation
The bill would tax live dealer games at 20% and the rest of the games offered at 55%, though there is a five-year period where operators would be allowed to take promotional credit deductions.
Responsible gambling measures include a disclosure about the potential harms of gambling that users need to acknowledge they read on a monthly basis.
Cannibalization again dominated igaming debate
In his opening remarks at a Senate Budget and Taxation Committee meeting, Watson came straight after the debate that tanked the bill last year, namely that online casinos cannibalize the revenues of brick & mortar gaming facilities. He noted how he sent every member of the committee a letter about the Pennsylvania industry and how land-based casino revenue has grown even with online casinos launching in 2019.
“During the last year’s testimony Maryland Live! spent thousands to push a false narrative that jobs would be lost,” Watson noted, referring to the efforts by the Cordish Company-owned casino in the state. He noted that the company currently operates an online casino in Pennsylvania, despite claiming it detracts from the bottom line.
“What we’re asking for in the state of Maryland is exactly what they’re doing in Pennsylvania today, with Maryland Live! at the helm. Maybe they want to hold on to a quasi monopoly or are afraid of competition.”
When Cordish representative Mark Stewart spoke in opposition of the bill, he acknowledged the company did launch an online casino in Pennsylvania, but also noted they hired just a single person in relation to that launch.
Cordish was not the only operator in the state to speak in opposition of the bill. Bobbi Jones of Churchill Downs property Ocean Downs testified about the company’s declining revenues at Pennsylvania property Presque Isle Downs. She claimed the casino had to release 45% of the workforce in the wake of iGaming passing.
Surprisingly, Penn Entertainment also came out in opposition of the bill. While the company representative said the company is not opposed to iGaming, they did not think this version of the bill was something they could support.
Sponsor says anti-igaming casinos are “greedy”
In response, Watson suggested some sort of provision that would require a casino not to fire any union employees if revenues maintained a certain level year-over-year. He also doubled down on the notion that those claiming cannibalization are being dishonest.
“Folks are making money. Any casino that implements igaming and gets rid of employee is doing it out of greed, not because they don’t have the money to do it.”
While Watson and several other industry experts including former head of the New Jersey Division of Gaming Enforcement (DGE) David Rebuck insist there is no cannibalization, the long list of opponents of the legislation cited a range of studies suggesting that is not the case.
Like last year, the fiscal note on the bill anticipates expected losses in the retail sector with igaming expansion, projecting $122.3 million in tax revenue losses from land-based by year five.
MGM National Harbor’s Darryl Barnes pointed out that the larger threat to land-based casinos’ bottom line is Gov. Wes Moore’s proposal to up the tax on table games from 20% to 25%.
Land-based operators weren’t the only ones testifying in opposition. Union reps, local business groups and anti-gambling advocates also logged statements in opposition.
Minority business participation another hearing focus
Other groups spoke tentatively in favor of the measure, including some MBEs like Urban One that hope to be involved in the burgeouning industry. However, there were some concerns from committee members like Sen. Joanne Benson that the barriers to entry for some of these MBEs are problematically high.
There was no vote on the measure on Wednesday but the hopes of the bill advancing appear slim, according to industry insiders. Given the largely negative tone of the meeting, it would not be surprising if the committee is where the bill starts and ends this legislative session.
