Posted on: December 6, 2023, 12:58h.
Last updated on: December 9, 2023, 12:24h.
Battle lines are being drawn over the prospect of bringing internet casinos to Maryland.
After an iGaming bill failed to advance earlier this year, expectations are rising that the issue could again find itself on the agenda when the state legislature reconvenes in 2024. There are signs of growing public support to be able to play poker, slots, or roulette on their laptops or cell phones. But union officials in the state are sounding the alarm that iGaming would lead to lost jobs at the state’s six casinos.
Meanwhile, a recent state-commissioned report found that iGaming would quickly become a nearly billion-dollar industry.
Maryland lawmakers failed to act on an iGaming bill introduced this year before adjourning in the spring. But there are signs the issue will return to the agenda when the legislature begins its new session in January. The state Department of Legislative Services Office of Policy Analysis included iGaming in a recent comprehensive report on key issues that could be considered next year.
Up to $900M Market
The Maryland Lottery and Gaming Control Agency, which regulates sports betting and casinos in the state, also recently released a report on the prospects of iGaming in the state. The state commissioned Las Vegas-based consulting firm The Innovation Group to prepare the report.
The report estimated that iGaming would raise more than $533 million in gross revenue in its first year, and that revenue would rise to $900 million over the next three years before leveling out going forward. Adding iGaming would reduce the take of brick-and-mortar casinos by about $200 million once the online market was mature, according to the report.
The tax rate for iGaming would be a key consideration in any upcoming legislative push, and the report outlines options ranging from 10% to 30% of gross receipts. While online gaming should typically be taxed at a higher rate than land-based casinos, the report says that consideration needs to be balanced against policymakers’ desire to lure players away from existing black market online casinos. Maryland currently taxes table games at a rate of 20%.
“With current gaming tax in Maryland at the level it is, it would be challenging to give online gaming a higher tax rate and simultaneously expect operators to aggressively market to players at illegal online casinos,” the report stated.
If the state wants to see any benefit from iGaming, the tax rate needs to be at least 15%, according to the report. At that level, the state would see $37.4 million in new tax revenue in 2029, according to the report, while it would lose $7.8 million if iGaming were taxed at only 10%. If the tax rate were set at 45%, the state would see nearly $308.9 million, according to the report, which assumed gross revenues would remain constant in all scenarios.
The report also cites concerns that problem gambling cases would rise with the introduction of online gaming, as has reportedly happened in Pennsylvania and New Jersey. The authors also point to an existing and strong problem gambling program in Maryland, and note that some of the iGaming proceeds would be dedicated to those efforts.
Poll: 75% Would Vote Yes
A new poll found 75% of Marylanders said they would vote in favor of a measure legalizing online casinos if it is included on the 2024 ballot. The poll of 1,000 self-identified registered voters was commissioned by MDBetting.com and conducted by the online survey firm Pollfish, Inc., and found strong support across all subcategories by age, gender, and education level.
The poll found 83% of men support online casinos, compared to 69% of women. Broken down by age, support was lowest among the youngest voters: 63% of those aged 18-24 support online casinos, compared to 72% of those over the age of 54, and more than 80% for all other age groups.
Before the question can be put to voters, the Maryland legislature has to vote to add it to next year’s ballot.
Unions Warn of Lost Jobs
The prospect of iGaming is worrying to the employees of Maryland’s land-based casinos. In an op-ed published Wednesday, two union leaders say the Lottery Commission’s report didn’t capture the potential of job losses that could accompany an expansion of iGaming.
Jason Chorpenning, president of the United Food and Commercial Workers International Union Local 27, and Shane Sterry, vice president of the Seafarers Entertainment and Allied Trades Union, called on the legislature to reject iGaming.
With its myopic focus on the gaming revenue these out-of-state and foreign companies might generate, the report glosses over the massive losses of Maryland jobs that would inevitably accompany iGaming,” Chorpenning and Sterry wrote in an op-ed for MarylandMatters.org. “For example, in neighboring Pennsylvania, iGaming has eliminated 2,000 jobs — nearly 10% of all Pennsylvania brick-and-mortar casino jobs. Many other states, like Indiana, have said “No” to iGaming for the same reason — it’s a job killer.”
With a Democratic governor and majorities in both houses of the legislature, labor unions are generally seen as holding a fair amount of influence in the state capital.
