ANNAPOLIS — The future of sports betting in Maryland was sure to be a looming topic in the 2019 legislature, and Delegate Kevin Hornberger is now squarely amidst the debate over how to proceed.
House Bill 1132, filed by Hornberger (R-Cecil) and fellow Delegate Jason Buckel (R-Allegany) on Feb. 8, seeks to allow wagering on sports in the state beginning July 1 under the authority of the Maryland Lottery and Gaming Agency, forgoing the debated need for a state referendum on the matter.
For Hornberger, the expansion of sports betting in the state has been a particularly personal fight. Appointed by House Speaker Michael Busch in 2015 as the only Republican delegate on the Joint Subcommittee on Gaming Oversight and also serving each year on the Ways and Means Committee, which oversees gambling-related legislation, Hornberger has had a front row seat for the expansion of gambling in the state.
In the past two years, he and Buckel have filed bills addressing sports betting, hoping to get Maryland farther ahead in the legalization race in case the Supreme Court overturned Nevada’s monopoly. Both bills failed to advance, however, as Democratic leaders prioritized other efforts and lawmakers debated whether a referendum would be necessary to authorize it and who should be allowed to operate sports betting books.
Meanwhile, the high court did just as expected in May 2018, ruling in favor of New Jersey that sports gambling is a matter of states’ rights and overturning the longtime chokehold that Nevada had on sports books. Some states, like nearby Delaware, Pennsylvania, New Jersey and West Virginia, as well as Washington, D.C., were among the firsts to allow sports wagering after rushing to pass legislation within weeks or months of the court ruling.
Now, Maryland is trailing behind its neighbors in the race to collect legalized sports wagers, and Hornberger hopes to avoid putting the state further behind with a referendum, the earliest of which could be put in front of voters is 2020.
On Thursday, Hornberger said he and Buckel do not believe a referendum is needed to legalize sports betting.
“We’re of the opinion that residents have legalized gambling in the state, and it’s up to the legislature and (Maryland Lottery and Gaming Control Agency) to decide how regulate it,” he said. “Every time the State Lottery comes up with a new scratch-off ticket game, we don’t go to a referendum to authorize it.”
Specifically, HB1132 rests on the belief that the sports gambling could be controlled by the Maryland Lottery, a potential loophole solution with legal uncertainty.
A 1972 constitutional amendment approved by state voters created a state lottery with authority to consider various forms of lottery games without further approval, according to the Associated Press. However, questions could be raised about the degree to which private entities such as casinos, horse racing tracks or lottery vendors could be involved before a new program would effectively become an expansion of commercial gambling.
Others are concerned about Article XIX of the Maryland Constitution, which was approved in a 2007 special session to allow slots gambling in the state. Section 1, Chapter 5 reads that, “The General Assembly may only authorize additional forms of expansion of commercial gaming if approval is granted through a referendum, authorized by an act of General Assembly, in a general election by a majority of the qualified voters in the state.”
Voters have previously approved of gambling via slot machines and table games in 2008 and 2012 referendums, respectively.
As a stopgap measure to ensure the issue moves forward this year, Delegate Jay Walker and five co-sponsors filed House Bill 963, which would put the issue to a referendum in 2020.
When asked whether he and Buckel had sought an opinion from the Maryland’s attorney general on whether they could bypass a referendum, Hornberger said only that he had been told that “the language is ambiguous.”
Last month, Democratic State Senate President Thomas “Mike” Miller and Speaker of the House Michael Busch both expressed hope for moving forward without having a referendum, but appetite for that path may be waning. When asked if he’s been able to lobby support of his Democratic leaders for HB1132, Hornberger noted that he’s still reaching out, but the bill offered by Walker, vice chair of the House Ways and Means Committee, served as a notice of sorts.
“They haven’t taken a formal position on whether to seek a referendum, but the filing of a referendum bill sends a pretty clear message to me,” he said.
When asked about Gov. Larry Hogan’s position on the competing bills about sports gambling, a spokeswoman for the governor said he was taking a wait-and-see approach.
“The governor has previously expressed support for the rights of states to make this determination, and we anticipate this issue will continue to be debated during this session,” Shareese DeLeaver-Churchill said via email Thursday. “The governor will carefully review any version of legislation that reaches his desk.”
If Hornberger can manage to ferry his bill to passage, however, it could reap millions in revenue for the state, casinos and racetracks. HB1132 proposes an 80-20 revenue split between the entity and state, respectively — in line with the ratio from table games. The 20 percent coming to the state would flow into the Education Trust Fund.
Only casinos and racetracks would be allowed to offer sports betting in Maryland under Hornberger’s bill, whereas other states, including New Jersey, have undefined nexuses for betting, meaning online websites can offer wagering to anyone whose GPS is within the state’s boundaries.
“We think that defining the nexus for wagering will help prevent underage gambling and help curtail habitual gambling,” Hornberger said. “We already have these great oversights in action at our casinos and racetracks, so let’s make sure that sports betting is benefitting from them as well.”
The gaming entities would have to buy a sports betting license for $300,000 and then renew it annually for $50,000. Those fees would be split between the Education Trust Fund, the Problem Gambling Fund, and local impact funds.
Hornberger said that he’s met with Matthew Heiskell, general manager of Hollywood Casino Perryville, numerous times about the topic of sports betting.
While estimated revenues for HB1132 have yet to be calculated, Hornberger’s similar bill from last year estimated annual statewide revenues from sports betting around $7 million. Compare that to the state’s table game revenues of $7.9 million from last month alone, or even $33.6 million from slot machines, and the smaller revenue impact is obvious.
“On its own, (sports betting) won’t bring in a ton of money to the casino, but it will bring in new people who will spend money of food and drinks and possibly play the other games they offer,” Hornberger said.
Heiskell emphasized that point to the Whig last month, adding that the Perryville casino’s location also makes it particularly susceptible to out-of-state competition.
“We are probably impacted more than any other casino in the state on sports betting because Delaware, Pennsylvania and New Jersey have run ahead of us to open that up,” he said. “That issue, maybe more than any other, puts us at a disadvantage, so we’ll be spending time in Annapolis is year talking about that.”