Maryland Sportsbook Requests to Ease Incentives Rules Denied

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Maryland sportsbook operators have seen their numerous requests made to the Maryland Lottery and Gaming Control Agency (MLGCA) for more lax regulations regarding incentives and promotions be continually denied. That’s according to records recently obtained by The Baltimore Sun.

The SuperBook Bar & Restaurant is Camden Yards’ newest amenity on Eutaw Street. Maryland sportsbooks have unsuccessfully tried to convince state gaming regulators to ease their rules on certain regulations, The Baltimore Sun reports. (Image: Camden Yards)

Legal sports betting in Maryland began at five of the state’s six brick-and-mortar casinos in December 2021. Online sportsbooks began their operations last November.

In states where in-person and online sports betting is permitted, the vast majority of the wagering activity is typically facilitated over the internet. That has been the case in Maryland. In May, for instance, 95% of the $320.2 million wagered was made online.

The MLGCA to date has issued 16 mobile sportsbook licenses, with 10 of the license recipients having commenced their online operations. Those licensees complement the brick-and-mortar casino sportsbooks and five other retail sports betting locations.

With the state having a financial interest in the newly liberalized online sports betting market, as oddsmakers share 15% of their gross proceeds with the state, the MLGCA encourages sportsbook operators to regularly suggest amendments to the state’s sports betting regulations.

Recommendations Dismissed

The Baltimore Sun reports that there have been many sports betting regulatory changes petitioned by the state’s licensed sportsbooks, but they haven’t exactly been well received by the regulatory agency. Maryland’s most-circulated daily newspaper says licensed sportsbooks have submitted numerous recommendations, but none have yet been approved.

One such regulatory change sought by gaming interests is how the state requires oddsmakers and their marketing teams to notify the MLGCA about new promotions. Under the state’s current rules, a sportsbook must give the state a 48-hour notice about any new promotion with a detailed description of the incentive and its associated terms and conditions before presenting the offer to patrons.

Sportsbook officials recommended that the state instead allow the companies to provide the terms and conditions to the MLGCA within five days of the promotion going live. Oddsmakers argued that sports betting markets are fluid, and promotions are often developed on the fly.

The submission of promotions prior to advertising/marketing efforts limits the ability to adequately consider promotions because of unknown variables which often accompany events that are attractive for sports bettors,” the proposal read.

Another regulatory change sought by the books regarded the offering of “free” and “risk-free” bets, promotions that have faced much scrutiny across the country after some bettors said they were tricked into signing up with a sportsbook through such marketing ploys. Many “free” bets aren’t actually free, but instead provide bettors with credits to continue betting.

Maryland sportsbook firms also unsuccessfully asked the MLGCA to lift the cap on how much promotional money they can issue to players. Under the state’s sports betting rules, beginning in 2024, sportsbooks can only issue up to 20% of their previous year’s gross sports betting revenue as promotional play. There is no cap for 2023.

The promotional cap is designed to increase the amount of taxable income, as losses incurred by sportsbooks from promotional plays can be deducted against their gross income.

Big Bets

Maryland is a sports-obsessed state that’s home to three professional sports franchises, including the NFL’s Baltimore Ravens, MLB’s Baltimore Orioles, and the NFL’s Washington Commanders, the latter of which plays at FedExField in Landover.

Maryland is also one of the richest states in the country, as the average household income last year was nearly $87K. That ranked first among the 50 states and trailed only DC at $90,800.

In the period from January through May 2023, Marylanders wagered more than $1.81 billion on sports through legal books. That handle includes promotional wagers. Oddsmakers kept about $225.7 million of the action, though their taxable win was just $124.9 million after deducting promotional losses.

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