Maryland’s Sports Betting Bill Tackles Problem Gambling

Few sports betting bills prioritize problem gambling. However, Maryland is one of the few states that funds problem gambling services well. Maryland is starting strong by building responsible gambling into its sports betting bill. It meets and exceeds the National Council on Problem Gambling’s five responsible gaming principles, signaling Maryland’s commitment to bettors. Here’s how Maryland’s sports betting bill, researchers, and regulatory agencies plan to combat problem gambling in the wake of sports betting legalization.     

Maryland Sports Betting Bill Overview

Maryland is approaching its new sports betting industry with unique priorities. The Maryland Gaming Commission will prioritize sports betting licenses for companies with “significant Black or women ownership.” This policy is about more than righting historical inequities. When Maryland legalized medical marijuana, not one Black or female-owned dispensary received a medical marijuana license. Maryland’s policymakers want to avoid that mistake. Lawmakers know how important it is to move into the sports betting industry early and stake a claim. They don’t want to create a new industry and leave historically marginalized groups out of it. 

The rest of Maryland’s sports betting bill includes standard information. It sets a tax rate of 15%. But its licensing fee is unique. Maryland’s annual licensing fee is 1% of a sportsbook’s average annual revenue over the previous three years. That allows small businesses and large businesses to compete without being over-encumbered by annual licensing fees. However, the license application fee is $500,000, which is a major obstacle to any sports betting startups. So, Maryland’s sports betting bill is a mixed bag for small innovative companies. 

Responsible Gambling In Maryland

Maryland’s sports betting bill and regulatory agencies work together to adhere to maximize safety for sports bettors. That includes the state’s approach to problem gambling intervention. The National Council on Problem Gambling (NCPG) has five responsible gaming principles that it recommends each sports betting bill include: 

  • Committing 1% of sports betting revenue to problem gambling services
  • Mandating responsible gambling tools for sportsbook operators to offer
  • Assigning a regulatory agency to oversee sportsbooks  
  • Conducting ongoing surveys to track problem gambling and identify the best interventions
  • Setting a minimum betting age

While the NCPG would like to see these initiatives in a federal bill, states need to implement these measures, too. These five principles are helpful guidelines for bettors to see how much their states have invested in bettor safety. Here’s how Maryland measures up. 

1% Sports Betting Revenue 

The NCPG recommends that states commit 1% of their sports betting revenue. A percentage of revenue allows different-sized states to personalize their approaches to problem gambling. Rhode Island doesn’t need to worry about the same number of problem gamblers as Michigan. Not only are the states different sizes, but Michigan authorized more igaming operators than Rhode Island. A percentage of revenue approach gives both states the flexibility they need for their igaming industries. 

Maryland is also offering more mobile sports betting licenses than any other state. It’ll probably never award all 60 mobile sports betting licenses simultaneously. But it’s part of its push to create the nation’s most competitive sports betting industry. (Although, the $500,000 license application fee undercuts that goal.) With a goal as ambitious as Maryland’s, it needs to pour a lot of money into problem gambling prevention. 

Based on Maryland’s projected $217 million market size, Maryland’s Problem Gambling Fund exceeds the NCPG’s 1% recommendation. Maryland’s Problem Gambling Fund has about $5.3 million allocated for 2022. That’s 2.4% of projected sports betting revenue. It’s a strong start, and at a glance, Maryland looks like the most prepared state to combat an increase in problem gambling. 

Troubling History

Maryland has struggled to allocate money to problem gambling services before. From 2010 to 2012, Maryland failed to spend over half of Maryland’s Problem Gambling Fund. In 2012, the Governor withdrew $950,000 from the Problem Gambling Fund to cover budget shortfalls in the wake of the Great Recession. So, making the money available has been an issue for Maryland. 

However, Maryland’s sports betting bill calls for:    

  • Establishing a 24-hour hotline for compulsive and problem gambling
  • Free or reduced-cost treatment programs
  • Outreach programs 

While it has these programs available already, the hope is that keeping them in the bill will ensure money is available for these programs. Maryland has approached problem gambling much better in the early 2020s than in the early 2010s. However, policymakers must remain diligent. They must ensure the money they’ve set aside to combat problem gambling is used to do combat problem gambling.   

Ongoing Surveys 

There’s no such thing as a one-time fix for problem gambling. So, states must continue to collect data to ensure responsible gaming policies remain relevant to problem gamblers. 

Maryland’s sports betting bill doesn’t call for periodic surveys. However, the Maryland Center of Excellence has an ongoing research project studying problem gambling. Its survey in progress will be critical to get a problem gambling baseline before sports betting goes live. If this survey can track changes in problem gambling following sports betting expansion, it can further help policymakers intervene and address it. 

Ongoing surveys don’t have to be mandated through a sports betting bill. However, someone must be responsible for performing them. Problem gambling isn’t an unavoidable natural disaster. It’s a condition that can be caught, prevented, and treated to keep sports betting safe for Maryland bettors. 

It will also be less expensive to intervene early than to treat many problem gamblers at once. It’s similar to how it costs $20-$50 billion per year to prevent pandemics and just under $2 trillion to recover from one. 

The Remaining Responsible Gaming Principles 

The remaining three principles are bare minimum standards that every state includes in its sports betting bills. Every state mandates responsible gaming requirements for sportsbooks. For example, sportsbooks must to display the National Gambling Helpline number. Sportsbooks are also required to allow bettors to set time limits, wager limits, and place themselves on self-exclusion lists. 

Sports betting bills also assign regulatory bodies to oversee new sportsbooks. In Maryland, the state’s Gaming Control Board will oversee sportsbooks. But every state has its own version of this requirement, whether it’s a control board or a commission.

However, the absolute bare minimum for a sports betting bill is setting a minimum gambling age. In most states, including Maryland, it’s 21. However, there are a few states, like Rhode Island, where it’s 18. The NCPG would prefer a standard gambling age across the United States. But the NCPG welcomes its inclusion in state bills. 

Since these three principles are givens in any state’s sports betting bill, Maryland gets no extra credit for including them. However, bettors should be happy that three of the NCPG’s five responsible gaming principles are engrained in sports betting legislation. That leaves only a few areas of policy that demand scrutiny in the wake of any igaming expansion.    

Maryland’s Responsible Gambling Approach  

Responsible gambling means more than slapping the National Gambling Helpline on mobile sportsbooks. It also means proactively finding bettors who are at risk of developing problematic gambling habits. On paper, Maryland has embraced this expanded responsibility. Its sports betting bill and state institutions cover all five of the NCPG’s responsible gambling principles. 

However, Maryland must not repeat its past mistakes. Having funds in the Problem Gambling Fund doesn’t matter if those funds are unavailable to organizations that need them. Everything looks good on the surface. But Maryland’s execution of its responsible gaming principles must remain in the spotlight.    

Most states struggle to get responsible gaming right in their bills. But Maryland is one of the best-positioned states to enforce this critical area of gambling legislation. 

About the Author

Christopher Gerlacher

Christopher Gerlacher is a Senior Writer and Contributor at Maryland Sharp, with a focus on the sports betting industry and the financial and political impact of gaming on the state.