Maryland was behind most of its neighboring states in legalizing slot machines and table games, leading to years of hand-wringing about Marylanders’ money flying across the border to casinos in Delaware, West Virginia and Pennsylvania. This year, the House of Delegates — yes, the same body that blocked slots for years — took action to see that didn’t happen again. Just in case the Supreme Court struck down a 1992 law prohibiting sports betting, the House voted overwhelmingly to put a referendum on November’s ballot to authorize it here. But this time, it was the Senate that quietly killed the idea. Both the House bill and a similar Senate version failed to get so much as a committee vote in the upper chamber.
Here we go again. The high court on Monday threw out the entire federal statute, opening the way for states to decide for themselves whether to legalize sports betting, and in the Mid-Atlantic, many have been preparing for that eventuality. In Delaware, where a limited professional football betting program was grandfathered in by the 1992 federal law, state officials have quietly been moving to immediately launch expanded offerings should the Supreme Court rule as it did Monday. Pennsylvania last year enacted a law allowing sports betting, contingent on the court’s decision. West Virginia did the same in March. And New Jersey is the state whose lawsuit led to this decision in the first place. Because Maryland failed to get a referendum on the 2018 ballot, the earliest that voters could approve legal sports betting here would be 2020.
And that’s probably no big deal.
It’s not that there isn’t a ton of money in sports betting. There assuredly is — about $150 billion in annual wagering, depending on whose estimate you choose. It’s just that there’s very little money in legal sports betting. In Nevada, the only state where full-fledged sports betting has been legal, casinos’ sports book makes up about 2 percent of gambling revenues. It’s hardly worth the bother, and as legal sports betting spreads from state to state (as is all but inevitable) it will become even less so. Those who want to bet on sports don’t lack the opportunity to do so now, and there’s little reason to expect they would feel the urge to go to a casino to do it legally rather than continuing whatever arrangements they’ve already made. It might be possible with substantial efforts at enforcement to drive that activity out of the shadows, but it would take years and probably concerted federal action to make that happen. There’s no need to rush.
That’s more or less the conclusion Maryland senators drew this year. State fiscal analysts estimated a wide (and not altogether impressive) range of potential revenue from sports betting — anywhere from $13.7 million to $181.2 million a year. To put that in context, the state’s existing casinos pulled in more than $140 million in revenue from slots and table games last month. And this is not a situation in which Maryland could gain some sort of permanent competitive advantage by being first. All our neighboring gambling states are going to have sports betting come on line at roughly the same time. Delaware officials think they might be able to eke out a few million in extra revenue because their existing infrastructure will enable them to move faster, but that the advantage will immediately vanish as other states come on line. No one appears to view sports betting as a destination activity.
Maryland’s legislation this year bogged down over the question of whether horse tracks should also be eligible for sports betting licenses, as the House bill specified, or whether the business should be confined only to the casinos, and the urgency of the issue was quite simply not sufficient to overcome that.
Now that the Supreme Court has acted, there is little doubt that Maryland will be addressing this issue again, and the pressure will now be much greater to put a referendum on the 2020 ballot. The delay might actually prove to be a good thing. It will give us time to see what the market for widespread legalized sports betting looks like, to determine what regulatory approach and tax rates work best, and to iron out questions about what kinds of locations for sports betting and how many would be in the state’s best interests. We may lose out on a few million in tax revenue because of the delay, but it would be worth it to get the policy right.
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