Another iGaming bill is expected to be included in Maryland’s upcoming legislative session. The bill features a substantial tax hike from the previous iteration, which never made it out of last session’s committee hearing.
Let’s delve into the latest updates on the bill and envision the potential impact it could have on the online sportsbooks industry.
We Won’t Miss the Boat This Time
The last time an online casino gambling bill was considered in Maryland it had a meager 15% tax on revenues. It remained in committee until the legislative session expired. There were also those like state Sen. Katherine Klausmeier, who left no doubt about her feelings on the issue.
“I would vote against that in a ‘New York Minute,’” said Senator Klausmeier. “It’s just too easy to lose money.”
“When we passed the sports wagering [bill], we should have said part of that money is going to problem gambling,” Klausmeier said. “We missed the boat. We won’t miss the boat this time,” she said if iGaming is ultimately passed.
Lottery and Gaming Control Agency Director John Martin wrote to lawmakers, “Other potential operators do not have industry experience in this market, and expanding to too many operators can dilute the business, making it difficult to be profitable.”
Tax Hike
But this time around, Senator Ron Watson has added incentive to pass the latest version of an iGaming bill, which includes a tax increase that would skyrocket from 15% to 46% on revenues, including 1% for problem gambling programs.
Senator Watson explained the reason behind the sudden and substantial tax increase by saying, “Because the casinos can afford it. The margins are huge because there is no overhead. I believe there’s a lot more that can be done through iGaming to support the state’s financial deficit.”
Last year’s SB 267 sports betting bill was sponsored by Watson and so too is this year’s with much of the same language, albeit with a noticeable spike in the tax rate. The hallmarks of the bill are as follows:
- Assigns the State Lottery and Gaming Commission to regulate online casinos.
- A license fee of $1 million for four years (up from $500,000 for five years).
- A maximum of two skins for each Maryland casino, creating the possibility of 12 Maryland online casino apps.
- Tax rate of 45% going to the Education Trust Fund.
- An additional 1% of tax and licensing fees to a problem gambling fund.
- Provides gaming data to data analytics and eSports programs at Morgan State and Bowie State universities.
Watson mentioned that his bill “is very thoughtful about problem gaming, a good start to solving our revenue hole, provides data to Murray State and Bowie State and jobs to live dealers. All the pieces are there. Now it’s time to get some folks on board and get this across the line.”
As for placating legislators like Senator Katherine Klausmeier, Watson has added language that would direct a portion of the funds to problem gambling in this newest version.
“We’re going to put 1% to problem gaming because that’s where I get the biggest pushback. A 1-800 number won’t just flash on the screen when patrons log in but when they log off. And users have the ability to put any kinds of limits or controls they want on their accounts.”
Bookmakers Review will continue to monitor this story and update our readers as events unfold.
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