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Maryland Online Casino Hopes Rest On Unlikely Budget Inclusion

Sources tell PlayUSA that unless Maryland online casino comes out of the budget conference committee, this likely will be its last hearing of 2024.

Online Gambling Maryland Bill
Matthew Kredell Avatar
5 mins read

A much-awaited Senate hearing of the Maryland online casino bill passed by the House generated little attention from committee members Tuesday. And that’s likely to be the last legislative hearing on Maryland iCasino this session.

The Senate Budget and Taxation Committee heard HB1319, which the House passed 10 days earlier by a vote of 92-43.

Del. Vanessa Atterbeary introduced the bill. One committee member voiced her concerns. The committee chair asked a couple of questions. And discussion ended after just 18 minutes.

Sources tell PlayUSA that unless Maryland online casino comes out of the budget conference committee, this likely will be its last hearing of 2024.

House sponsor makes her case

Atterbeary, who chairs the House Ways and Means Committee, told Senate committee members that Maryland online casino was part of the revenue package passed by the House.

The House wants to use the $300 million in projected online casino revenue to help local jurisdictions and the state meet their obligations to the Blueprint for Maryland’s Future. The state has only funded the education plan through 2027.

PlayUSA estimates that the Maryland online casino market could bring in $1 billion by 2029, much more than the state projected in the fiscal note attached to Atterbeary’s bill. That would help counties fund the Blueprint for years.

Atterbeary explained:

“I put this in because I’m very passionate about our children, which I know all of you are. And, as all of you know, we are running out of Blueprint funds come 2028. This is the House’s way and the way Ways and Means came up with to generate funds specifically for the Blueprint. I am passionate about not walking back on that commitment, particularly to our Pre-K three and four year olds.”

She said people are already gambling on the internet illegally in Maryland. In that regard, she compared the effort to Maryland opting to legalize and regulate cannabis last session rather than continuing to let the illegal market run rampant.

“I think it is incumbent on us to capture that market, regulate it and get rid of the illegal market,” Atterbeary said. “By doing that, you can put safeguards in it. For folks that are worried about problem gaming, there are no safeguards for iGaming happening right now. Absolutely no safeguards.”

Senator calls Maryland iCasino ‘devastating to people of color’

Sen. Joanne Benson said Atterbeary’s testimony was a lot for the committee members to digest.

“Can you speak to what you think would happen to the casinos where you have a thriving business that is surrounded by thriving businesses if we have this iGaming whereby our adults, our children and everybody can play 24 hours a day?” Benson asked Atterbeary.

Benson cited concerns of cannibalization and a negative socio-economic impact of legalizing iGaming in a February report by Morgan State University’s Center for Data Analytics and Sports Gaming Research.

“If you look at it, it is pretty devastating for people of color. … It’s also devastating because of their opinion of the damage that it’s going to have on the casinos that are already operating in the state of Maryland as it pertains to employment. … The thing that gives me heartburn is the number of jobs that are going to be lost and also what is going to happen to the businesses that are close to these casinos.”

Atterbeary said she had not read the Morgan State report. She referred to Michelle MacGregor from the Sports Betting Alliance to address the cannibalization concerns.

MacGregor cited a recent study conducted by Analysis Group on behalf of the Sports Betting Alliance that iCasino is an additive to retail casinos that has helped stabilize downward trending land-based casino markets.

PlayUSA also recently discussed cannibalization concerns with regulators of legal US iGaming markets and found out that they do not believe online casino has negatively affected land-based casino operations in their states.

Fund meant to address cannibalization concerns

Atterbeary explained that the House addressed cannibalization concerns by establishing a Video Lottery Facility Displacement Fund. Administered by the Maryland Department of Labor, the fund would support brick-and-mortar casino employees displaced by the implementation of internet gaming.

“We had six reports. Only one said that there would be cannibalization. Due to concerns about job loss and possible cannibalization, off the top the House decided to create a $10 million fund. For anybody who works at a brick and mortar, if you are displaced by your job you can go and get your salary on top of getting unemployment from the state.”

For the first 12 months that internet gaming operates in the state, up to $10 million of the proceeds must be distributed to the fund.

Contributions to the fund may be used for:

  • Administrative expenses.
  • Grants to former casino employees displaced by internet gaming’s implementation to offset any reduction in former employees’ take-home pay.
  • Supplementing unemployment insurance payments received by former casino employees displaced by internet gaming’s implementation.
  • Establishing job-training programs for former casino employees displaced by internet gaming’s implementation.
  • Any other program established by the Maryland Department of Labor to assist former video lottery facility employees displaced by internet gaming’s implementation.

Budget discussions key to Maryland online casino chances

The House and Senate passed budget plans last week. While the House included iCasino revenue in its budget proposal, the Senate did not.

Sen. Ron Watson, who introduced online casino legislation in the Senate, explained to PlayUSA last week:

“My general sense is the Senate passed a balanced budget without any tax increase and is very reluctant to move forward with iGaming because of concerns about problem gaming and cannibalization.”

A conference committee will work out the differences between the House and Senate budget proposals in the next week.

The conference committee includes Sens. Guzzone, James Rosapepe, Cory McCray, Nancy King and Paul Corderman, and Dels. Darryl Barnes, Mark Chang, Jazz Lewis, Stephanie Smith and Jefferson Ghrist. Atterbeary mentioned at the hearing that Maryland iCasino had Barnes’ support.

Maryland Matters reported last week that Senate leaders, including Senate President Bill Ferguson, have dismissed iGaming as a non-starter. A final vote on the Maryland budget is scheduled for April 3. The Maryland legislature adjourns April 8.

“We’ve been consistent for months,” Ferguson said. “It is what it is. It’s a hard no on iGaming and a hard no on combined reporting. Those are not things we’re going to be taking up this year. Appreciate the perspective of the House, again we share similar values and where we want to go in the long run, in terms of what we want to invest in. How we get there is where the difference is.”

So it’s unlikely that Maryland online casino makes it any further than Tuesday’s hearing. Watson told PlayUSA following the Senate hearing:

“If it doesn’t come out of the budget committee, it is dead.”

Matthew Kredell Avatar
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Matthew Kredell serves as senior lead writer of legislative affairs involving online gambling at PlayUSA. He began covering efforts to legalize and regulate online gambling in 2007 and has interviewed more than 300 state lawmakers around the country.

View all posts by Matthew Kredell

Matthew Kredell serves as senior lead writer of legislative affairs involving online gambling at PlayUSA. He began covering efforts to legalize and regulate online gambling in 2007 and has interviewed more than 300 state lawmakers around the country.

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