It is now less than two weeks to election day with supporters of a referendum for legalized sports betting appearing to secure victory. Following success in the nearby state of Virginia and DC, the referendum addressed in Question 2 on the Maryland ballot asks voters “Do you approve the expansion of commercial gaming in the State of Maryland to authorize sports and events betting for the primary purpose of raising revenue for education?”
Thus far sports betting has received nearly unanimous support in both the Maryland State House and Senate. The reason this is even up for a vote is due to Article 19 of the Maryland Constitution.
In 2008, Article XIX authorized commercial gaming of slot machines. It also included guidance on approving any changes to or any new types of commercial gaming in the state. According to Article XIX, those new ventures, such as sports betting, must be approved by referendum in a general election. As it has achieved acceptance on the ballot, the major questions are coming where the revenue from sports betting will be allocated and who will it genuinely benefit.
Shane August, a DC-based minority-owned sports wagering operator commented :
This is an opportunity to legalize and regulate something people are going to do anyway. One reason we launched in DC is that they were small business favorable. They were actually the first jurisdiction in the country to make a way for small businesses to participate.
Sports wagering is currently illegal in Maryland, but with sports betting on the ballot this November, August believes a yes vote on Question 2 could help him and other minority-owned small businesses grow.
Craig Zucker, the District 14 delegate for the Maryland State Senate, said., “The lowball assumption is that Maryland will get an additional $20 to $40 million in additional revenue from sports betting,” Zucker said a yes vote on Question 2 would not only help grow a new industry in the state, but it would help fund education as well. He also added, “We have a 100% guarantee that the additional revenues for sports betting will go to the Education Trust Fund.”
Another question is what guarantee is there in the current referendum that minority small business owners like August will be able to profit from legalizing sports betting? Darryl Barnes, Chairman of the Legislative Black Caucus, said there truly isn’t one, but if passed, he said he’ll be fighting for that representation amongst the kingpins of the industry.
“You think of FanDuel and DraftKings Sportsbook, they’re the central hub for such an event,” Barnes said. He argues that Maryland needs to look at the infrastructure of sports betting like “the infrastructure, the sports power itself, and the ticketing system.”
In conclusion, Zucker said that because the coronavirus caused casinos to shut down, the Education Trust Fund suffered a $150 million loss. He does not believe that sports betting can completely fill that hole, but he believes it will make a significant difference.
Directly commenting in a press release on Question 2, Maryland Governor Hogan said, “This initiative builds on the very successful ‘Hogan Lockbox,’ which puts casino revenues in a lockbox dedicated to education. We are already funding our K-12 schools at record levels, and this is another way to ensure that is the case for years to come.”
The governor also noted that the ongoing coronavirus pandemic continues to eat away at state revenue. Growing the gambling industry could supplement the diminished incomes. Hogan added, “Question 2 provides a critical revenue source for public education without raising taxes on families and businesses.”
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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