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Maryland Online Casino Bill passes the house

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After announcing a “highly regulated industry,” and pushing HB 1319 amended, Maryland Representative Vanessa Atterbeary’s bill moved out of the House and headed to the senate 16 March.

On a Saturday, two days before the crossover date, the House voted to approve a bill which would allow the November election to decide whether or not icasino should be legalised.

Now, the senate has less than one month to approve this bill. General assembly will adjourn 8 April. According to Associated Press, on 15 March the house leadership unveiled a budget of $1.3bn ($1.2bn/PS1.2bn/EUR1.3bn), which relied upon tax revenues from legal online gambling to finance future transportation and education costs.

Maryland has been the focus of attention for all in the online casino industry. Maryland is considered by many to be the most likely state in the country to pass an online gambling bill during this year. Maine is the only state that has not yet legalised online casinos. Several states, including Illinois and New York, were expected to legalize marijuana at the beginning of the Legislative Season.

In the past and this year, it has been difficult for lawmakers and stakeholders to pass similar bills. The reasons for this range from a lack of understanding about what online gaming is, to regional players believing they will not benefit.

Maryland’s bill for an online casino underwent a number of changes as it made its way to the House. Some of the industry’s changes will be seen as negatives by the industry, which will lead it to lobby against them as the bill moves through the Senate.

Three levels of online casino licensing are available

Atterbeary added an amendment to HB 1319 on 16 March by the time it reached third reading. This would have increased the number of licenses available. This amendment banned credit card funding of accounts, and also added guidelines on diversity equity and inclusion.

This bill sets a minimum of 55% tax on all electronic games. The tax rates vary between 18%-57% in seven states. Taxes on live dealer games will be 20%.

The initial fee would be $1m for a licence valid for five years. Renewals will equal 1% of the average profit over the previous three year period. The tax revenue will be used to fund the Blueprint for Maryland’s Future. It would include sending money to the counties which host casinos and horse racing tracks, as well as small businesses, women and minorities.

The tax collected will go towards problem gambling and responsible gaming programmes.

Bill establishes three licensing levels and the “social equity partners”, who play an important role, are a part of this structure. The social equity partners consist of individuals or groups who have resided in “economically depressed areas” at least 5 years out of 10 for the past decade.

These people must also have either attended public schools in economically depressed areas for at least 5 years, and have also completed at least 2 years of a 4-year Maryland College where at least 40% of the students are eligible for Pell Grants. Or, they must also have personal net worth that is below the standard set by the Lottery Commission, the regulator.

Who can apply for a license?

According to the law, six casinos in the state can be granted online gambling licenses. However, they have to be owned by social equity partners at least 5 percent (directly and indirectly). If a casino is at least one third owned by social equity partners, it can be granted a second licence and, in some cases, even a third.

The four OTBs, two bingo halls and the online sports betting license holders are all eligible for seven “Class B” licences. The Black-owned media firm Urban One is also included.

Finaly, a process of competitive bidding will be used to award at least five or up to eighteen stand-alone licences for digital gambling. First round bidding will be for applicants who are socially responsible.

In 2020, when lawmakers approved online sports betting, the US regulators implemented some of the strictest guidelines for minority participation. The regulatory process was slowed down. It took two years for the lottery to establish rules, and operators to comply with standards. Maryland was one of the US states that took longest to go from being legal to being live on-line.

Arkansas and Puerto Rico were the only two that took more time. The average regulator takes about six months for a market to be online.

Five additional amendments to the bill were proposed on 16 March. Only one was accepted, and it dealt with unionisation and live dealers. The failed amendments included:

  • Consumers must fund their accounts in person
  • Two-factor authentication is required every time the player logs in to an account
  • Individual bets are limited to $5, and the maximum wagering for a 24-hour period is $100.

Some people are still opposed to the bill. WJZ News reported that last week, Republican legislators and casino-worker unions gathered in opposition to the bill due to fears of job loss.

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