Maryland approves draft rules for sports betting operators

Last Thursday, the Maryland State Lottery and Gaming Control Commission (SLGCC) unanimously backed a set of draft rules for legal sports betting, pushing the state’s move towards a regulated industry closer to a reality.

The proposed rules, which were published on the regulator’s website on Wednesday, allow operators to apply for licenses to offer in-person wagering at the state’s six casinos, three professional sports stadiums, racetracks, OTB locations, commercial bingo halls with over 200 machines, and the Maryland State Fairgrounds.

The rules also allow for statewide mobile wagering, with the number of proposed online permits limited at 60.

Following the approval, the Commission will now announce a 30-day public comment window to allow residents of the state and industry stakeholders to weigh in on the draft regulations before publishing the final rules.

After that, the regulator will open the application process for operators, allowing interested businesses to submit their bids. The request for proposals will be available on the regulator’s website.

The Free State is working on rolling out its retail betting market by fall. Online wagering will start later.

Giving priority to minority- and women-owned enterprises

The draft regulations published by the SLGCC cover several topics including application fees and taxes, requirements for operators, license review process, appropriation of funds generated by sports betting, and self-exclusion.

On the issue of permits, the rules encourage equitable participation by minority- and women-owned businesses, and this is reflected even in the review and selection process.

All interested applicants will be subjected to a two-part review process to determine their eligibility to offer regulated wagering in the state.

The first part will entail evaluation by the SLGCC to establish whether the applicant has fulfilled all the requirements outlined in the RAF process. Those who qualify will move to the second stage, which will involve thorough review by a seven-member committee known as the Sports Wagering Application Review Commission (SWARC).

The SWARC will determine whether an applicant qualifies for a license and notify the SLGCC of its decision. The regulator will award permits based on this decision.

What types of licenses are available for MD sports betting?

Maryland sports betting law provides for four types of sports betting permits:

Class A-1: The permit will be available to professional sports teams and stadiums at a cost of $2 million in application fees and a license bond of $6 million. Those eligible to apply include MLB’s Baltimore Orioles, and the Washington Football Team and Baltimore Ravens NFL franchises.

Class A-2: Type A-2 permits will be awarded to VLT operators with less than 1,000 machines and racetracks operated by the Maryland Jockey Club. The application fee for these licenses is $1 million and a $3 million bond.

Class B-1: The permit will be available to facilities with more than 25 employees and aggregate gross receipts exceeding $3 million. Those who are eligible to apply include the Maryland State Fairgrounds. Applicants will be required to pay $250,000 in application fees and a bond of $750,000.

Class B-2: The license will be awarded to smaller businesses with fewer than 25 employees and less than $3 million in gross revenue. Eligible applicants will include bingo halls, and they will be required to pay $50,000 in application fees and a license bond of $75,000.

Those who are interested in operating mobile sportsbooks in the state will pay an additional $500,000 to the Commission for an online permit. However, minority- and women-owned businesses will be allowed to pay a discounted application fee.

Licenses will be valid for five years.

Official league data mandate

Besides proposing a unique framework for the sports betting application review process, the rules drafted by the SLGCC also propose the use of official league data in settling wagers.

According to the draft rules, official league data is defined as: “Statistics, results, outcomes, and other data relating to a sporting event obtained by a sports wagering licensee under an agreement with a governing entity or an entity expressly authorized by a governing entity for determining the outcome of a wager placed.”

If the proposal makes it to the finalized rules, it could mean that the regulator will require sportsbooks to use league data to determine winning and losing bets, even for simple wagers. A majority of states with a regulated sports gambling industry only require the use of official league data for settling in-play or in-game bets.