Maryland Lawmakers Discuss Legalization of Sports Betting

Maryland Sports Betting Laws

Maryland Live! Casino and MGM National Harbor would be 2 of the 6 casinos with a sportsbook.

Maryland lawmakers are discussing an amendment which would legalize sports betting, if the U.S. Supreme Court overturns the Professional and Amateur Sports Protection Act (PASPA) of 1992. On December 4, the Supreme Court hears oral arguments in a lawsuit filed by American sports leagues against the State of New Jersey, which tried to pass legal sports betting in 2011 and 2014.

PAPSA was established in 1992 as a 46-state ban on traditional sports betting. PASPA banned brick-and-mortar sports betting in all but 4 states, grandfathering in already-existing sports betting laws in Nevada, Oregon, Montana, and Delaware. Only Nevada is allowed to operate full brick-and-mortar sportsbooks.

However, the Supreme Court may all change. New Jersey argued that PASPA violates the Commerce Clause of the US Constitution, because it gives on set of states a commercial advantage over other states. The sports leagues say their leagues need protection, because 50-state legalization would undermine the public’s faith in the integrity of their games.

Maryland Public Hearings on Sports Betting

The Maryland General Assembly wants to anticipate any changes to the law, to help casino operators like MGM National Harbor and Maryland Live! Casino launched sportsbooks in the months after PASPA repeal.

The Maryland Joint Committee spoke with the AGA’s vide president of public affairs, Sara Slane, who stated, “I would urge you and other legislators to get out in front of this, because when it does happen, you’re going to have states ready to go in first position…to open up sports books.”

The Supreme Court should come to a solution between April and June of 2018. In the event that PASPA be overturned, it would allow any state to authorize sports betting. There are casinos in about 40 of the U.S. states, and most of those states would consider legalization and regulation of sportsbooks.

States like Utah, Hawaii, and Texas would continue to ban sports betting, as they ban land-based casinos.

Maryland Sports Betting Legalization

Under the proposed plan, Maryland voters would be allowed to vote on any law authorizing sports books. That is the same process New Jersey took which it sought to open sportsbooks in 2011, with a statewide referendum. With a substantial casino industry, it could be worth the trouble for Maryland.

The American Gaming Association estimates that about $150 billion is bet on sports nationwide, with most of it being done illegally. The AGA estimates that less than $5 billion going into that legally through Nevada sports books. After last season’s Super Bowl, the American Gaming Association estimated that 97 percent of the $4.7 billion was bet illegally on the game.

Maryland lawmakers estimate that between their six casinos’ proposed sportsbooks, the yearly gaming growth in casino revenues would be between 1.5% and 6.5%. These numbers are based off of the revenues from Nevada and Delaware.

Proposed Revenues for Maryland Sportsbooks

In 2016 Nevada generated 1.95 percent of gaming revenues ($219.2 million) from sports betting. In 2015, Delaware generated 6.3 percent of gaming revenues ($37.9 million) from sports lotteries. Maryland numbers likely would follow more closely with the Las Vegas numbers, because of the tiny nature of the Delaware gambling industry.

Sports betting is gaining in popularity, as sports continue to be a major part of the American pop culture. A record $4.5 billion was bet on sports in Nevada last year, and the casinos retained winnings of about 5% of those wagered. Fixed-odds sports betting pits the gambler versus the casino, though vigorish is where the casino makes most of its money.

Sports betting have taken a lead over poker in Nevada over the past few years. The poker market has plateaued in recent years, due to the changes in a nationwide online poker community since Black Friday in 2011.

Post-PASPA Preparations

In 2012, New Jersey tried to pass sports betting to help their ailing Atlantic City casino industry. The top US sports leagues — NFL, NBA, Major League Baseball, NHL — joined with the NCAA to sue New Jersey. The lawsuit has gone through the US justice system for 5 years, and the US Supreme Court will hear the final appeal on December 4, 2017. A ruling on PASPA is expected early next year.

At the start of 2017 a bill was introduced to develop a task force specifically to study the “implementation of sports gaming” and the federal laws on the activity of the matter. Although the bill failed there are still heavy discussions about PAPSA and the appeal.

Several states, including Mississippi and Connecticut, have started to prepare for a potential change in federal law. In early 2018, Maryland casinos might be able to launch sportsbooks. New laws have to be passed now, if Maryland sportsbooks are going to launch in summer 2018, in time for the peak time of the year: NFL season.