Maryland Sports Betting Commission Reworks Online Licensing Criteria

The Maryland Sports Wagering Application Review Commission (SWARC), facing steep criticism from the governor’s office, has reworked its licensing criteria that will determine which applicants are approved to operate online sports betting.

The Maryland Sports Wagering Application Review Commission meets online July 13, 2022. Maryland sports betting remains limited to in-person betting, but SWARC is working to remedy that by getting online sportsbooks up and running. (Image: SWARC)

Maryland residents approved of a sports betting referendum during the November 2020 election. But the state General Assembly, seeking to achieve equity in its online gaming industry, passed what Gov. Larry Hogan (R) deemed an “overly complex” bill.

SWARC has deflected criticism that it’s taking too long to issue online sports betting permits on claims that it’s the legislature’s fault for necessitating that the internet licensees be fairly granted to include minority- and women-owned businesses.

SWARC commissioned a “disparity analysis” that remains ongoing. The study is to determine if Maryland’s gaming industry, which is currently limited to six brick-and-mortar casinos and the state-run lottery, has resulted in any sort of discrimination that warrants heightened preference for diverse sports betting applicants.

Licensing Process Overhauled

The bulk of the betting action in states where retail and online bets are allowed takes place remotely over the internet. Many Marylanders are eager to have legal, regulated sportsbooks on their mobile devices in time for the kickoff of the Baltimore Ravens NFL season in September.

SWARC recently asked its legal staffers to determine if the commission can expedite the online sports betting licensing process by reworking the racial, ethnic, and gender grading criteria. During yesterday’s meeting, the commissioners were told a solution had been reached.

Over the past year, we’ve heard extensive legal advice regarding constraints on us in managing the online licensing process,” SWARC Chair Tom Brandt said during yesterday’s commission meeting held via Zoom. “To avoid further delay, we have asked staff and our professional team to draft regulations that exclude race and gender-based license criteria.”

Brandt says eliminating such online sports betting licensing standards will allow SWARC to more easily issue mobile permits for entities already qualified and regulated by other state minority laws, most specifically the six land-based casinos.

He says excluding race and gender from the licensing criteria now will not prevent the state from achieving racial, ethnic, and gender diversity among the licensees in the future. Brandt said that will be accomplished as the state issues additional mobile and small business sports betting licenses once the disparity analysis is completed.

The disparity analysis is crucial, as the state must demonstrate discrimination in a marketplace before it can give preferential consideration to minority applicants.

“SWARC is legally required to conduct an industry analysis to determine whether there is a legal basis to implement race or gender-conscious measures in the application and evaluation process,” Brandt explained.

Legislature Approval Needed

SWARC commissioners signed off on the amended online licensing procedures during yesterday’s meeting. The updated regulatory process now goes to the Maryland Legislature’s Joint Committee on Administrative, Executive, and Legislative Review for emergency approval.

If the legislature ratifies the altered online sportsbook licensing process, Brandt says SWARC will begin fielding applications and issuing permits to approved entities.

Five casinos are operating in-person sports betting, but gaming consultants hired by the state forecast that more than 90% of the sports bets will be placed online once mobile books are operational.

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