Maryland legislature to analyze legalizing online gaming like virtual table games and slot machines

Capital Gazette
Maryland legislature to analyze legalizing online gaming like virtual table games and slot machines
Wild Casino

The Maryland Senate began hearings Wednesday on a bill to remove some of the last blocks to unfettered gaming statewide — a plan that would ask voters to legalize online casinos.

SB 267, sponsored by Sen. Ron Watson, a Democrat from Prince George’s County, and Senate Majority Leader Nancy J. King, aMontgomery County Democrat, would ask voters in November 2024 whether to legalize online gaming, such as virtual table games or slot machines. It would continue the expansion of gambling the General Assembly has approved in recent years, including online sports betting that began in November. Currently, table gaming is limited to Maryland’s retail casinos.

Funds generated from the expansion would be used for education, particularly the Blueprint for Maryland’s Future, an education reform initiative.

“We are missing one vital component with respect to gaming and that’s the fourth leg of the casino tool, which is (internet) gaming. The fundamental aspect of this bill, it creates a new funding stream for education, and I have deep concerns that we need to do what we can to support our Blueprint,” Watson said. “I am grateful for the efforts to fund the Blueprint but we have all seen and been briefed, that we have some significant challenges to meet in the out years. According to the Comptroller’s Office and detailed in the fiscal note, as much as $97 million could be generated by fiscal year 2028.”

Companies would be able to apply for online gaming licenses, which will cost $500,000 and last five years under the bill. Licensed companies will keep 85% of profits from internet gaming, with 15% of proceeds earmarked for the Education Trust Fund.

The trust fund fuels the Blueprint for Maryland’s Future Fund, a 10-year plan for the public education system passed in 2021. It expands access to early childhood education, provides more preparation for college and career readiness, increases the standards and diversity of school staff, and generally provides more resources aimed at student success.

According to Gov. Wes Moore’s budget, there is enough money budgeted to sustain the Blueprint through fiscal 2026, which is when the projected revenue from SB267 could help.

As of fiscal 2024, which begins July 1, including Moore’s allocation of $500 million from the General Fund, the Blueprint fund contains $2.2 billion dollars. By 2026, the fund’s balance decreases to $253 million before becoming a $1.4 billion deficit in fiscal 2027.

“The projections show that we have (Blueprint for Maryland’s Future) funding for the first few years but then that funding falls off and we have to be very open-minded and find new sources of revenue. This is one of those,” Watson said. “I think we’ve gotten past that sensitive spot of ‘Should we or shouldn’t we do this?’ Now, it’s all about how can we capitalize on it? How can we use it to generate Black wealth, if that’s possible? How can we make more wealth in our state?”

The state gaming commission estimates online gambling could generate as much as $72 million a year for education from its 15% stake, according to the bill’s fiscal note. However, legislative analysts said it’s hard to estimate the financial impact using figures from surrounding states, given their variability, and given that in-person gambling and lottery sales could decline with the advent of online gaming.

Some are skeptical about the benefits of a gaming expansion. The Washington, D.C.-based advocacy organization Stop Predatory Gambling told Capital News Service that Marylanders lost $3 billion of personal wealth in fiscal 2022 to state government-run commercialized gambling, and, since casinos first opened in Maryland in 2010, citizens have lost $23 billion, the group said.

“(The American Psychiatric Association) now defines gambling addiction at the same level as heroin, opioids and cocaine. We do not market those products like the state government markets gambling,” said Les Bernal, national director of Stop Predatory Gambling. “Online gambling is like gambling fentanyl, it’s like the most extreme form of all. It’s opening the casino right in your bedroom so you can sit there in your pajamas and lose everything.”

The bill remains in its early stages, with members of the Budget and Taxation Committee agreeing the proposal needs some work.

There are other gaming issues before lawmakers this year, but they are largely tweaks to existing laws, including bills to adjust the number of machines that bingo parlors can operate and a proposal to allow senior centers in St. Mary’s County to host gaming.

The latter bill, HB 263, sponsored by Del. Matt Morgan, a Republican from St. Mary’s County, allows senior activity centers in St. Mary’s County to conduct games, such as small-stakes poker or pitch, where participants can wager small sums of money. This legislation limits entry fees to $25 and a maximum of $50 per session while also specifying that leftover prize money be used to fund future senior center programming and general gaming in the county.

Morgan also acknowledged the recent expansion of gambling in the state means the legislature must be attentive yet patient in addressing the nuances of implementation.

“We got on gaming a little bit late, comparable to our neighboring states. With slots and table gaming, it came a few years later, and now we have sports betting,” Morgan said. “We just made a lot of changes over a short amount of time. Sports betting just came recently so you kind of need to see how this stuff plays out before you start making changes to it.”