A decade after the first casino opened in the state, Maryland voters will decide whether to expand legalized gambling by permitting the sort of betting — on the Ravens, Orioles or other sports teams — that casinos and racetracks have long sought.
If Ballot Question 2 is approved in the Nov. 3 election, Maryland would join neighboring jurisdictions Pennsylvania, West Virginia, Delaware and the District of Columbia in allowing sports wagering that has proliferated as the nation’s attitudes toward gambling have relaxed.
The ballot measure asks whether voters want to "to authorize sports and events betting for the primary purpose of raising revenue for education.”
The question amounts to a largely blank slate that the General Assembly would fill in later with critical details such as which entities — casinos? racetracks? sports teams? — would offer sports wagering, how many could operate betting apps, how much licensees would be taxed, and just how much of the proceeds would in fact be dedicated to education or other uses.
If approved, Question 2 “kicks a ball into a very crowded playground and gives a lot of people the opportunity to kick it around," said Roger Hartley, dean of the College of Public Affairs at the University of Baltimore. "The big questions will be what kinds of sports betting and where, when, how?”
Hartley said it’s not rare for ballot measures to leave details for later. “Voting referendums are typically general ways of initiating a policy, and later the flesh is put on the bones. So this isn’t completely outside the boundaries.”
Despite the complexities, legislators say they would expect to approve a sports betting structure in the 90-day legislative session beginning Jan. 13. That would begin a process of licensing to get the program implemented.
While it’s uncertain when Marylanders could legally place bets, industry observers hope the system could be running in time for the next NFL season in the fall of 2021. The NFL is particularly popular with bettors.
Maryland legislative leaders have broadly endorsed granting sports betting licenses to tracks and casinos, where rooms could be established akin to those in Las Vegas with carrels, banks of television monitors showing games, and odds displayed on oversized, blinking boards.
Many legislators and lobbyists also anticipate permitting brick-and-mortar operators to run mobile apps so gamblers could bet on their phones and other devices. There ultimately could be at least a half-dozen apps for Marylanders to choose from.
The state could permit wagering on professional and college games, potentially including University of Maryland football and basketball contests.
New Jersey, which led the effort to legalize sports wagering, does not allow bets on its in-state college teams — a concession made years ago to critics who believed gambling could affect the integrity of college sports.
The University of Maryland had no comment on whether school officials would object to in-state betting on Terps games, athletics spokesman Jason Yellin said.
The U.S. Supreme Court in 2018 struck down a congressional ban that had restricted sports betting to Nevada and a few other states with a history of allowing such wagers. Nearly two dozen states have since legalized sports wagering, although not all the operations are up and running yet.
If Maryland sports betting proceeds were taxed at 20% — a rate lawmakers have considered in the past but are not bound to — the state’s annual share would be about $18 million, according to a Department of Legislative Services estimate. Proponents claim it could raise twice as much.
Question 2 advocates, including an organization funded with $500,000 from FanDuel and $250,000 from DraftKings — the fantasy sports sites — are promoting the referendum as “a win for education.” A second organization called Fund our Future has been formed by Maryland casinos and racetracks, but its initial campaign finance report isn’t due until Oct. 9.
In placing the question on the ballot, the General Assembly indicated that its “intent” would be to use proceeds for K-12 public education, according to a Department of Legislative Services analysis. But that’s not a requirement.
“I think it would be a tough sell for the General Assembly to dedicate the dollars to anything else [besides education] and it would harm the credibility of the institution if that were to happen,” said House Minority Leader Nic Kipke, an Anne Arundel County Republican, who supports approving the referendum.
“I would say that it is unlikely to be used for other purposes, but it is not impossible for it to be used for other purposes, especially in tough economic times,” Kipke said.
For years, school funding advocates complained that casino revenues were not boosting education funding as they anticipated because the money largely just replaced existing state funding for education, which was redirected to other purposes.
Voters in 2018 approved a constitutional amendment to guarantee that the state’s share of casino money — amounting to hundreds of millions of dollars a year — goes toward increasing education spending.
Del. Nick Mosby, a Baltimore Democrat, said he expected similar “lockbox type language” to be included in the legislation next year ensuring that sports betting proceeds supplement existing funding for public school systems. Mosby, who was heavily involved in last session’s sports betting debate, won last June’s Democratic primary for City Council president, making it likely he will leave the General Assembly and become Baltimore’s No. 2 official at City Hall.
The Maryland State Education Association, the state’s largest teachers union, hasn’t yet taken a position on Question 2. But Sean Johnson, the group’s executive director, said sports betting proceeds “could be part of a multifaceted solution” to meeting education funding needs.
Analysts say the public’s tolerance for gambling has shifted since the rancorous 2008 campaign in which Marylanders voted to legalize slot-machine gambling in the state. Hollywood Casino Perryville became the first of six Maryland casinos in 2010, and voters approved adding table games — such as blackjack and roulette — to the mix in a hotly contested 2012 referendum.
An untold number of Marylanders already are betting on sports through offshore operators or bookies. While technically illegal, such activity is rarely prosecuted.
Under a 2007 amendment to the Maryland Constitution, any commercial gambling expansion must be approved by voters.
Opponents over the years in Maryland have included groups complaining that gambling invites crime into their communities, or that it amounts to a tax on casinogoers who can ill afford it.
State Comptroller Peter Franchot has long argued that gambling isn’t the answer to address state fiscal problems. This year, the Democrat “has no plans to take an active role in November’s sports betting referendum," spokeswoman Susan O’Brien said.
“In spite of his past efforts, organized gambling is now omnipresent in Maryland,” she said. "While the comptroller still regards the expansion of gambling as a flawed approach to raising public revenue, he actually believes that sports betting is far less corrosive than slots, which preys so disproportionately on people with fixed and limited incomes.”
There is little coordinated opposition to Question 2, according to Democratic and Republican lawmakers and organizations hoping to secure a license.
“In states like Maryland we haven’t seen signs of organized opposition,” said Craig Fravel, CEO of racing operations for The Stronach Group, which owns Pimlico Race Course and Laurel Park, who says that the two tracks would be “a natural home” for sports betting.
He said the public has grown increasingly accustomed over the years to gambling.
“I think it’s a very, very good chance it will pass. You never know,” said lobbyist and former state senator P.J. Hogan, who said sports wagering could be a popular new amenity for his client, Rocky Gap Casino Resort in Allegany County. “You might have a couple and one wants to play slots and the other wants to bet on some sporting events. We don’t want them not being able to do that in Maryland,” Hogan said.
Sports betting may also extend to stadiums in the state. While spokespeople for the Ravens and Orioles declined to comment, the Washington Football Team has expressed interest (its stadium is in Prince George’s County) and Washington’s Capital One Arena — home to the Wizards basketball team and Capitals hockey team — already permits wagering in a designated area.
“I actually foresee a day when you’ll have in-stadium wagering at every seat,” said Irwin Kishner, co-chair of the sports law group at Herrick Feinstein, a New York law firm. “You’ll certainly have [betting] areas at stadiums.”
M&T Bank Stadium and Oriole Park at Camden Yards are situated so close to Horseshoe Casino Baltimore that the casino could struggle to compete if sports betting were permitted independently at the stadiums. “To the extent that sports betting is offered at either of the sports stadiums in close proximity to Horseshoe, we believe it is critical Horseshoe is made part of that offering,” said a statement by the casino, which the state and city rely on for millions of dollars a year in taxes.
DraftKings and FanDuel are also seeking a piece of Maryland’s sports betting market. Both fantasy sports operators have expanded into sports betting in states in which it is legal.
FanDuel is partnering with Baltimore-based Cordish Cos. to run sports betting operations at company properties, including Live Casino & Hotel in Hanover if the state permits it.
“Particularly in light of the existing health and economic crisis in the state and country, it’s important to ensure our casino industry remains competitive with our regional competitors in other states and we keep Maryland dollars in Maryland,” said Rob Norton, president of the Cordish Gaming Group and of Live.
DraftKings, which also could partner with a casino or other entity, said only that its focus is on “a successful referendum” and that it looks forward to working with Maryland lawmakers and regulators.
The Maryland Senate voted 47-0 last March to approve a sports betting bill. Under it, a licensee would have needed to pay a one-time application fee of up to $2.5 million and renew it annually at an additional charge.
It would have allowed sports gambling at the state’s six casinos and its thoroughbred tracks. Betting also would have been permitted at the Washington Football Team’s stadium if it were rebuilt or significantly renovated.
The bill stalled in the House after Mosby and others said they worried licenses could bypass minorities.
Before adjourning prematurely because of the coronavirus pandemic, the General Assembly passed a slimmed-down bill calling for the referendum and including a requirement that a study be conducted to determine whether racial minorities or women face a disadvantage in participating in the betting industry. If that’s the case, lawmakers could include provisions giving preference to underrepresented groups in the licensing process.
“It’s not that the House wanted to stop sports betting,” Mosby said in a recent interview. Rather, he said, it didn’t want to only reward “folks already at an exclusive table.”