Maryland House Passes Online Casino Bill Before Crossover Deadline

Maryland online casino legalization chances remain alive for 2024.

The House passed Maryland online casino legislation Saturday by a vote of 92-43. A three-fifths vote was needed to pass the constitutional amendment.

Maryland lawmakers worked overtime to pass the bill on a Saturday, ahead of Monday’s crossover deadline for bills to advance out of their original chamber.

“Since we’re going to be here on a Saturday, we might as well talk about something fun like gambling,” said Del. Nino Mangione.

Senate leadership assigned HB1319 to the Budget and Taxation Committee, which has heard the issue previously. If the Senate passes the bill before adjourning April 8, the question of legalizing online casino gaming will go in front of Maryland voters in November.

Outside of amendments offered, there was little discussion of the bill on the House floor. Bill author Del. Vanessa Atterbeary didn’t offer an introduction or concluding remarks before the vote but did respond to amendments. To those concerned about gambling, she asked her colleagues to regulate and provide consumer protections to what already occurs in the state.

“Currently, in the state of Maryland, there is illegal iGaming going on to the tune of about $200 million a year where individuals are playing where there are no safeguards on there,” Atterbeary said.

Maryland online casino amendments offered

Most of the discussion on Saturday related to four hostile amendments.

• Del. Ryan Nawrocki sought to require internet gaming deposits be made in person. It was rejected 35-95.
• Del. Kathy Szeliga wanted patrons to prove their identity in person when creating an online casino account. It was rejected 35-95.
• Del. Nicholaus Kipke proposed requiring two-factor identification when opening an online casino account. It was rejected 37-91.
• Del. Brian Chisholm wanted to limit wagers to $5 and a total of $100 over a 24-hours period It was rejected 34-93.

Delegates adopted one minor friendly amendment from Del. Linda Foley related to the labor peace agreement in the bill. It clarifies that the employer, in this case the online casino licensee or live dealer studio, remains neutral in a union drive.

Details of Maryland online casino bill

As passed by the House, HB1319 includes a complicated three-prong licensing structure that could lead to up to 30 Maryland online casino apps.

Here are the three iCasino licensing categories:

• Casino licenses: For the first license, Maryland’s six casinos must share 5% of iCasino revenue with a social equity applicant partner. By sharing 33% of iCasino revenue with a social equity applicant partner, casinos can obtain a second license and a bonus third license (with a 5% social equity partner).
• Class B licenses: The four off-track betting parlors and two bingo halls eligible for Maryland sports betting licenses are earmarked online casino licenses, as is Urban One, a black-owned Maryland-based media company that used to have a minority ownership stake in MGM National Harbor.
• Competitive bid licenses: A minimum of five licenses are put up for competitive bid. Any of the 18 licenses not used by casinos are added to what is available for competitive bid. The first round of bidding is for social equity applicants. The second round is open to all others.

The bill defines social equity applicants as a person or group of people that have lived in an economically disadvantaged area for at least five of the past 10 years and then either:

• Attended public school in an economically disadvantaged area for at least five of the past 10 years.
• Attended at least two years at a four-year college in a state where at least 40% of individuals are eligible for the Pell Grant.
• Has a personal net worth that doesn’t exceed an amount determined by the commission.

Other key details of the Maryland online casino bill include:

• Establishes a minimum tax rate for electronic games at 55%.
• Sets the tax rate for live dealer games no lower than 20%.
• Licensees pay an initial fee of $1 million for a five-year license.
• Renewal fee equal to 1% of licensee’s average annual proceeds over the previous three years.
• Live dealer studios must be located within the county of the casino licensee.
• Allows the commission to enter multijurisdictional agreements with other states to share player pools.
• Prohibits use of credit cards to fund online casino accounts.

Where Maryland online casino revenue would go

Atterbeary wants to use online casino revenue to fund the Blueprint for Maryland’s Future Fund, which currently only has funding through 2027. Here’s how else she plans to use the projected $300 million annual revenue from Maryland online casino.

• To counties with Maryland casinos: $6.5 million in 2026, $8.3 million in 2027, $10 million in 2028, $11.3 million in 2029, $11.4 million in 2030.
• For the Purse Dedication Fund for horse racing prizes: $4.9 million in 2026, $6.3 million in 2027, $7.6 million in 2028, $8.6 million in 2029, $8.7 million in 2030.
• To the Racetrack Facility Renewal Fund:  $900,000 in 2026, $1 million in 2027, $1.2 million in 2028, $700,000 in 2029 and 2030.
• To the Small, Minority and Women-Owned Business Account: $1.3 million in 2026, $1.6 million in 2027, $1.9 million in 2028 and $2.2 million in 2029 and 2030.
• For background investigations and regulatory activities, the State Lottery and Gaming Control Agency receives 1% of online casino proceeds.
• 1% of online casino proceeds to the Problem Gambling Fund.
• Counties in the Maryland receive 1% of online casino proceeds to be used for funding education.
• The remainder of online casino revenue goes to the Blueprint for Maryland’s Future Fund for education.

Maryland online casino has difficult road in Senate

Other than one hearing in the Senate Budget and Taxation Committee, the Maryland Senate hasn’t paid much attention to online casino this year.

Sen. Ron Watson introduced SB603 and referendum bill SB565 with different language than the House bill. Watson told Bonus.com that those bills will die at the crossover deadline. But the Senate will now have the opportunity to take up HB1319.

Watson said that Senate leadership doesn’t see the need for online casino revenue this year.

“The general consensus of the Senate is that a balanced budget has been developed and submitted. And, as such, no new taxes are required, nor are they ready to entertain this new revenue stream.”

Atterbeary’s focus is on how online casino revenue can ensure the Blueprint for Maryland’s Future Fund continues to operate successfully beyond 2027.

That message hasn’t resonated with Senate leadership. But House passage puts the pressure on the Senate to consider the issue.