Maryland Sportsbook Promotions May Potentially Be Reduced Due to Impending Regulatory Adjustments
Maryland's Sports Betting Industry Faces Regulatory Changes and Legal Challenges
Maryland's sports betting landscape is undergoing significant changes, with the Maryland State Lottery and Gaming Control Agency (MLGCA) proposing tighter restrictions on promotional free bets for online sportsbooks and a separate legislative push that could halt online sports betting by 2026.
The MLGCA's proposed changes aim to cap the value and frequency of free bet promotions and increase oversight of their terms and conditions to promote responsible gambling. Notably, after the first full year of a mobile sports wagering licensee's operations, the amount of promotional play given to bettors may not exceed 5% of total sports wagering proceeds generated in the prior fiscal year. This is a significant reduction from the current practice, where online sportsbooks can deduct 100% of promotional money in their first year and 20% after the first full fiscal year.
These changes, if enacted, could constrain the aggressive marketing strategies of major sportsbooks like FanDuel, DraftKings, and Caesars, possibly reducing customer acquisition incentives and altering competitive dynamics. However, these measures are designed to balance market growth with enhanced responsible gaming safeguards.
Simultaneously, Maryland Senator Joanne Benson has filed Senate Bill 1033, which seeks to shut down the legal online sports betting market entirely starting January 1, 2026. This bill would not affect retail sportsbooks but targets only online operations, which have been a significant revenue source and growth driver for the state. The 20-person General Assembly's Joint Committee on Administrative, Executive, and Legislative Review (AELR) needs to approve the proposed change for it to be enacted.
If Senator Benson's bill were to pass, it would drastically reshape the industry by eliminating the online segment, likely causing significant economic repercussions due to reduced tax revenues and decreased market activity.
In a separate development, the City of Baltimore has filed a lawsuit against FanDuel and DraftKings, alleging deceptive and unfair business practices. The lawsuit alleges that the sportsbooks leverage user data, sophisticated analytics, and personalized inducements to identify and exploit users with gambling disorders.
The proposed change only applies to mobile sports wagering revenues generated by the licensee. The Maryland State budget for 2023 includes a tax hike on sportsbooks from 15% to 20%. The AELR, consisting of 10 state senators and delegates, has proposed the regulatory change, but there are no imminent meetings listed on the AELR website.
In summary, Maryland's sports betting industry is at a crossroads, facing imminent regulatory tightening on promotions proposed by the MLGCA, alongside a legislative effort that could completely halt online sports betting by 2026, both of which could substantially impact market operations and growth prospects. Additionally, the ongoing lawsuit in Baltimore City Court against FanDuel and DraftKings adds another layer of complexity to the industry's future.
- The Maryland State Lottery and Gaming Control Agency (MLGCA) is proposing tighter restrictions on promotional free bets for sports betting in Baltimore, Maryland.
- The Orioles and other sports in Maryland, such as football, basketball, hockey, golf, tennis, racing, and mixed-martial-arts, may be affected by these proposed changes.
- If enacted, these proposed changes could affect major online sportsbooks like FanDuel, DraftKings, and mobile sportsbooks.
- Maryland Senator Joanne Benson has filed a bill (SB 1033) that could halt online sports betting by 2026, but it needs approval from the General Assembly's Joint Committee on Administrative, Executive, and Legislative Review (AELR).
- Baltimore City has filed a lawsuit against FanDuel and DraftKings, alleging deceptive and unfair business practices in sports betting.
- Starting from the first full year of a mobile sports wagering licensee's operations, the amount of promotional play given to bettors may not exceed 5% of total sports wagering proceeds generated in the prior fiscal year, according to the MLGCA's proposed changes.
- The Maryland State budget for 2023 includes a tax hike on sportsbooks from 15% to 20%.
- The AELR has proposed regulatory changes, but there are no immediate meetings listed on the AELR website.
- The ongoing lawsuit in Baltimore City Court against FanDuel and DraftKings could reshape the online sports betting industry's future in Maryland.
- The proposed changes only apply to mobile sports wagering revenues generated by the licensee and do not affect retail sportsbooks in Maryland.
- Maryland's sports betting landscape is undergoing significant changes due to regulatory and legal challenges, including politics and general-news topics such as crime and justice.
- The new regulatory environment and legal challenges could potentially impact the revenue and growth of sports betting industries in Maryland, which includes the Baltimore Orioles.
