Maryland Sports Betting Commission Responds to Governor’s Demands

The Maryland sports betting agency assigned with deciding how to issue mobile licenses has responded to Governor Larry Hogan’s (R) demands. Hogan had asked that the regulators do everything in their power to assure that online wagering is up and running in time for the NFL regular season start on September 8.

Hogan wrote the Maryland Sports Wagering Application Review Commission (SWARC) this week, ordering the regulators to expedite their processes to allow Marylanders to place legal, regulated sports bets on NFL games before the regular season kicks off. Hogan criticized the agency for allowing the mobile licensing progression to “become mired in overly bureaucratic procedures.”

In its first meeting since Hogan’s letter to the agency, which was shared publicly, SWARC Chair Thomas Brandt acknowledged the governor’s comments but attempted to clarify the commission’s functions and goals.

I understand many are frustrated that the process relating to the issuance of mobile sports wagering licenses has been time consuming,” Brandt said at the SWARC June 16 meeting. “I want everyone to know that SWARC and its support team have been operating as diligently and deliberately as we can under the Maryland sports wagering law that we’re tasked to administer.”

House Bill 940 set the regulatory framework for sports betting in Maryland after voters approved amending the state constitution to allow such gambling during the November 2020 election. Hogan signed the sports betting bill in May 2021.

At a Turtle’s Pace

SWARC provided the five commercial brick-and-mortar casinos applying for sports betting privileges with their retail sportsbook licenses late last year. The online licensing component, however, is more regulatory-intensive, as HB 940 seeks equity in the state’s expansion of online gaming.

In the states where both in-person and online sports betting is permitted, most of the action is facilitated over the internet. Maryland lawmakers said the casinos shouldn’t be the only beneficiaries of the state’s first foray into iGaming.

Instead, the General Assembly said small businesses — specifically women and minority-owned enterprises — should be afforded the same online sports betting opportunities as the casinos.

But that condition is greatly impeding the path to issuing mobile licenses. The sports betting legislation requires that before SWARC can grant mobile wagering permits to any entity, a “disparity analysis” must be completed to determine if there has been any sort of discrimination in the gaming marketplace that requires the state to give preference to minority-and women-owned businesses.

More Time Needed

SWARC says the equity probe is still being completed. The state regulators believe that providing the casinos with their mobile betting licenses before the disparity findings are known could allow the large gaming operators to establish a dominant market share before smaller entities even have a chance to target sports bettors.

These steps are necessary for SWARC to set forth a sports wagering application evaluation process that is legally sound, and to the maximum extent permissible by law allows SWARC to seek to achieve racial, ethnic, and gender diversity when awarding the sports wagering licenses,” Brandt explained.

Hogan believes SWARC should drop the points-based merit system it plans to use in determining which applications are approved. The governor said the “arbitrary points system” could result in “unachievable minority equity ownership goals” that will “only hurt those entities you are trying to help.”

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