Just like last month's state Senate hearing, the Maryland House of Representatives' hearing on online gambling also showed the industry's divisions.
The House Fundraising Committee held a hearing on Monday that lasted over four hours on HB 17 proposed by Representative Vanessa Atterbeary. This bill would allow online casino licenses to be linked with existing casino and digital sports betting licenses statewide. It is different from a bill passed by the House in 2024. Atterbeary stated that in response to colleagues' concerns, HB 17 would prohibit the use of credit cards for funding accounts.
She also mentioned that a constitutional amendment might not be necessary to increase electronic gambling. Traditionally, any expansion of Maryland's gambling industry has been decided by voters. However, Atterbeary pointed out that Maryland has held three referendums, legalizing video lottery terminals (2008), table games at physical casinos and adding a sixth casino (2012), as well as offline and online sports betting (2020). She said that voters have expressed their views and accepted digital casinos.
Atterbeary also discussed one of the gambling industry's most concerning issues—sweepstakes. Unregulated digital gambling platforms operate across the US, mostly in a gray area, meaning their legality is not clearly defined. These sites attract players with free games, but consumers can eventually purchase and win "coins" or "tokens."
Atterbeary and her bill's supporters argue that a legal market could create a framework to help combat the black market. She shared that the state has sent letters to 12 lottery operators. Surprisingly, six responded believing their operations are legal in Maryland, yet the state lacks specific laws to stop them.
No Consensus Reached
Like the Senate hearing on January 30, the House committee took no action on legal online gambling. The session is scheduled to continue until April 7, but the crossover deadline (when bills must be sent from one chamber to another) is March 17.
Legalization of online gambling in Maryland has caused significant divisions among stakeholders. Opponents and advocates for responsible gambling testified. They argued that introducing online casinos would increase the number of people at risk of gambling addiction in Maryland.
Mary Drexler of the Maryland Center of Excellence on Problem Gambling cited a study from Morgan State University, which showed that 75% of people who had accessed online games reported gambling problems, compared to only 22% who had not accessed online games.
Surprisingly, there is also infighting within the legal gambling industry. Representatives from BetMGM, Sports Betting Alliance (SBA), and iDevelopment and Economic Association (iDEA) believe that online casinos have promoted industry growth and generated more tax revenue. BetMGM, DraftKings, Fanatics Betting & Gaming, and FanDuel make up the SBA.
However, larger mid-sized operators like Cordish Companies and Penn Entertainment believe that online casinos are cannibalizing their physical assets. Sean McDonough, representing Penn, continued to say that the company would support the bill if licenses were limited to the existing six casinos.
This division could hinder the progress of legal online gambling as an issue in this session.
Smaller Venues Seek "Equal Playing Field"
Maryland's smaller gambling companies also have divisions. The state's sports betting law allows two bingo halls and four OTBs to also have digital sports betting licenses. These companies—many owned by minorities or women, as per state regulations—are also on the opposing side of expansion.
"Online gambling is a new form of gambling for the state, and existing casino companies have already profited substantially from their physical facilities," said Sidh Sushant, a representative from Delta Bingo. "We believe this should be a fresh start, and linking it only with casinos would be a mistake."
Alyse Cohen, owner of Long Shots OTB and Sportsbook, told the committee, "As Maryland decides how best to legislatively regulate the online gambling industry, I urge the committee to set an example of how to promote the growth of small businesses, not just behemoths like casinos.
"These smaller retail establishments are an indispensable part of Maryland's gambling network, and thus, they should all be granted igaming licenses. More importantly, I am deeply concerned that without the opportunity to offer igaming and compete on an equal playing field, these sports betting companies will fail."
Is Pennsylvania a Good Comparison?
However, Bobby Jones, a representative from OTB and Casino Ocean Downs, stated her company opposes the addition of legal online gambling. She said that after seeing what happened in Pennsylvania, Maryland cannot afford the consequences of unemployment. Pennsylvania is one of seven states that have legalized online gambling. Jones mentioned that in Pennsylvania, revenue for physical casinos dropped by 15%, and unemployment rates soared to 45%. Her company has a sister casino, Presque Isle, in Pennsylvania.
"Jobs have disappeared," she said. "Businesses have closed down, suffering losses."
Pennsylvania was a key topic of discussion in Maryland on Monday. Proponents pointed out that after introducing online gambling, the gambling industry's revenue increased. However, since the legalization of online gambling in 2017, the state has also added more casinos—two Las Vegas-style venues and three mini-casinos.
John Pappas, representing iDEA, testified for the bill, stating that "jobs are increasing in Pennsylvania, including igaming." He noted that live dealer studios are places where the state employs people. Maryland's proposal would allow the establishment of live dealer studios, which must be staffed 24 hours a day.
Opponents argue that these numbers do not equate to small casinos, nor do they benefit small casinos. Committee member Jason Buckel stated, "In my political career, there will be no more casinos." He also expressed regret over the general shift from community activities to a more isolated existence.
"We are becoming a technology-driven world," he said. "It has become normal for us to do these things just on our phones."
