Maryland Legislature Stalls on Gambling Bills Amidst Heated Debates

The Maryland House Ways and Means Committee held extensive hearings on two pivotal gambling-related bills but refrained from taking immediate action. The first bill proposed a ban on online sweepstakes platforms, while the second sought to permit historical horse racing (HHR) machines at off-track betting (OTB) facilities across the state. Despite a subsequent voting session scheduled for Wednesday morning, neither bill appeared on the agenda, leaving their futures uncertain.

Debate Over Sweepstakes Platforms

The initial bill under scrutiny, HB 1140, aimed to outlaw online sweepstakes platforms, which currently operate without state regulation or taxation. Casino operators have criticized these platforms, asserting they create unfair competition by bying state taxes and regulations.

Proponents of the sweepstakes platforms defended their legality under Maryland’s commercial code. Josh White, representing the Australian-based sweepstakes operator VGW, compared these platforms to popular games like Candy Crush. He explained that both are free to play, with consumers having the option to purchase game tokens for enhanced experiences. White emphasized that VGW uses sweepstakes promotions similarly to major corporations like McDonald’s and Microsoft, serving as marketing tools rather than gambling mechanisms.

Conversely, critics argue that these platforms closely resemble traditional gambling. Brad Rifkin, speaking on behalf of gaming company Light & Wonder, contended that if something exhibits the characteristics of gambling, it should be classified as such. He estimated that Maryland’s illicit gaming market, encoming sweepstakes and offshore platforms, is valued at approximately $6 billion annually.

Attorney Jeff Ifrah, representing the Social and Promotional Gaming Association (SPGA), cautioned that the language in SB 860—a similar bill advanced by a Senate committee on March 7—is overly broad. He warned that it could inadvertently ban legitimate online casinos while leaving the black market unaffected. Ifrah argued that the bill is unnecessary and would eliminate a form of digital entertainment that is currently legal under Maryland law.

Consideration of Historical Horse Racing Machines

The second bill, HB 1048, proposed authorizing HHR machines at five OTBs throughout Maryland. ers argue that these machines are vital for the survival of OTBs, which have faced financial challenges since the introduction of online sports betting in November 2022.

Alyse Cohen, owner of Long Shot’s OTB in Frederick, testified that her facility’s handle has declined by 33% since the launch of online sports betting. She expressed that while there was hope that retail sports betting would boost sales, the shift to online platforms has instead diverted revenue away from physical establishments.

Leslie Feliz, representing Chesapeake Gaming Group, echoed these concerns, stating that the dominance of online sports betting has made it challenging for smaller operators to compete. She highlighted that retail sportsbooks are falling short of expectations, and the proliferation of online betting has made it difficult for businesses like Chesapeake Gaming to secure retail partners.

Maryland’s sports betting legislation includes provisions to minority-owned and small businesses. However, the rapid shift to online wagering has disproportionately impacted these operators. Many OTBs, several of which are minority-owned, argue that introducing HHR machines would provide a necessary revenue stream to sustain their operations.

Opposition from Casino Operators

Major casino operators in Maryland, including MGM and Penn Entertainment, strongly oppose the introduction of HHR machines at OTBs. They argue that these machines closely mimic traditional slot machines, creating unfair competition, especially given the disparity in tax rates. While casinos are taxed at rates exceeding 40% on slot machines, the proposed tax rate for HHR machines is 15%.

Marta Harding, representing MGM, testified that the player experience on HHR machines is virtually identical to that of traditional slot machines. She cautioned that introducing HHR machines could disrupt the state’s existing gaming model, which has significantly contributed to Maryland’s education trust fund.

As of now, no gaming-related bills have advanced in the current legislative session, including proposals to legalize online casinos. Lawmakers and stakeholders remain divided on these issues, with no clear path forward. The House Ways and Means Committee’s decision to delay action on both HB 1140 and HB 1048 reflects the complexity and contentiousness surrounding gambling legislation in Maryland.

Source:

’’No vote on HHR or banning sweeps in Maryland house committee’’, igamingbusiness.com, March 12, 2025.