Maryland Update – August 6, 2018
Gov. Martin O’Malley has called a special legislative session to convene on Aug. 9 to discuss gambling expansion in the state. Lawmakers will consider the opening of a sixth casino in Prince George’s County, adding table games such as blackjack to the state’s existing casinos, and the possibility of regulating online gambling.
Maryland aims to keep pace with neighboring states such as Delaware, who enacted legislation in July that expanded brick and mortar gambling and also legalized online gambling. Maryland voters will have the ultimate decision on gambling expansion in the state on a vote in November, provided that lawmakers can approve a measure by an Aug. 20 deadline.
Maryland At Odds With Itself Over Land-Based Gambling Expansion, No Discussion Yet On Online Gambling Legislation
Despite its diminutive size, the oddly shaped state of Maryland is home to quite a bit of history on quite a few topics. From being one of the original 13 American colonies, also being home to what many believe to be the finest crab cakes in the world, to the site of one of the most prolific thoroughbred races in the history of horse racing, Maryland has more than its fair share of intriguing history.
One thing it apparently does not have, however, is a current interest in the nationwide question mark hanging over the subject of legalizing online gambling. Maryland has a state lottery, pari-mutuel wagering and slot casinos, and it also authorizes charitable gaming as fundraisers for clubs and organizations. But the state legislature has yet to entertain the idea of approving online gambling, possibly because it’s having trouble convincing itself that expanding the current gambling laws would be a beneficial move for state coffers.
Maryland Gov. Martin O’Malley has said as recently as June that he was willing to call a special legislative session in order to get the House of Delegates to pass a gambling expansion bill that he feels would increase the state’s sorely lacking revenue. Earlier this year, the Maryland Senate approved a measure that would allow the opening of the state’s sixth casino and permit Maryland’s existing casinos to offer table games in addition to slot machines, but the House does not appear to be interested. The measure would have lowered the tax rate on casino operators and allowed blackjack and roulette. And even though a commission was appointed to examine the issue, the proposal failed in the House.
O’Malley said he hoped the House would reconsider and vote the measure through so that the state could move on to other important issues. “I’d just like to get it resolved because I don’t want it to push other important issues aside and result in the sort of gridlock we saw in years past and that we saw just recently when both sides, the House and the Senate, decided to take the budget hostage and then we ended up without a budget,” O’Malley said. If the bill is to make it to a vote this year, it will have to be decided by the Aug. 20 deadline.[1]
Perhaps another reason the Maryland legislature isn’t in a hurry to digest information on online gambling is the May 2011 federal sting that originated out of Maryland and led to the indictment of two online gambling establishments. The indictment was the result of a 2009 investigation that used an informant who participated in online gambling activity with one of the targets of the investigation. ThrillX, operating out of British Columbia, Canada, and BMX Entertainment, out of Cyprus, were both shut down.
The indictment called for the seizure and forfeiture of ten dotcom gaming websites and the accounts involved in their operation. If prosecuted, the defendants will face up to five-year prison sentences for running an online gambling establishment and a possible maximum 20-year sentence for money laundering. U.S. Attorney Rod J. Rosenstein made it clear that there was zero tolerance for the operation or participation in online gambling within Maryland’s borders. “It is illegal for Internet gambling enterprises to do business in Maryland, regardless of where the website operator is located,” Rosenstein said. “We cannot allow foreign web site operators to flout the law simply because their headquarters are based outside the country.”[2]
The Preakness, A Lottery, And The Fight For More Than Just Slots–Maryland’s History Of Gambling
One summer night in 1868, Maryland Gov. Oden Bowie attended a dinner party in Saratoga, New York. The result of a discussion during that dinner party was the building of Pimlico Race Course in Baltimore to host the first Dinner Party Stakes in 1870. The winner of the race was New York businessman Milton Sanford’s 3-year-old colt, Preakness. Following the inaugural running of the Dinner Party Stakes, the track’s popularity grew, along with some common horse racing terms still in existence today. Billy Hayward, the jockey of Preakness, extended a wire across the track at the finish line with a silk bag attached that contained gold pieces. Upon winning the race, the jockey symbolically untied the bag and claimed the gold. It is believed that this is where the terms “at the wire” and “purse” money awarded to the winner of the race originated from.
Three years later, Bowie introduced a new stakes race in the spring of 1873 called The Preakness Stakes. A thoroughbred named Survivor has the distinction of being the first horse to win the Preakness Stakes, and this year, in its 137th running, I’ll Have Another won the Preakness in formidable fashion. With the exception of a few years, Maryland horse fans have always been able to place their bets on which horse they think will take the second leg of the Triple Crown, and there is no doubt that the Preakness Stakes will continue to be a gambling staple to Maryland, the United States, and the world for years to come.[3]
Maryland residents have also enjoyed the Maryland Lottery since 1973 after voters approved a constitutional amendment allowing for its creation the year before. Since its inception, the Maryland Lottery has brought in more than $28.6 billion and pumped more than $10.5 billion back into various state services. In 2011, the lottery earned $1.71 billion in sales. Of that total, the state received more than $519 million, which was divided to benefit both K-12 and higher education students, public health, public safety, and environmental programs.[4]
Voters again changed Maryland’s gambling landscape in 2008 when a constitutional amendment passed that allowed slot machines in five locations across the state. Hollywood Casino Perryville opened in the fall of 2010, followed by the Casino at Ocean Downs in early 2011. Revenue numbers from 2011 show the two slot casinos generated $103 million, with $50 million of that going to the state‘s Education Trust Fund. The two casinos employ about 500 people, A third casino, MarylandLive!, opened in June 2018. Maryland visitors and tourists will have to wait to see what the state legislature does with the current proposal to add table games to the existing casinos.[5]
Prospect Of Online Gambling Is Marginal At Best, For Now
While the state and its residents enjoy the benefits of the existing slot casinos, the state lottery, and the annual traditions surrounding the Preakness Stakes, the Maryland legislature will first have to come to some sort of agreement on the current proposal to allow casinos to offer table games such as roulette and blackjack. Even though the measure sailed through the Senate, it failed once it reached the House. Perhaps the moves made by other states concerning online gambling will not only inspire lawmakers in Maryland to look closer at allowing table games, but also to giving online gambling in the state a chance as well. But from the looks of it, such an endeavor seems to be far off in the future. Maryland residents will be betting on at least one more Preakness Stakes, possibly more, before they can legally play poker or casino games via the Internet.
Footnotes – Sources and Further Reading
[1] Governor O’Malley still open to special session on gambling – CBSLocal.com
[2] Operators of online gambling sites indicted – Justice.gov
[3] History of the Preakness Stakes by Wikipedia.org
[4] [5] About the Maryland State Lottery – MDlottery.com
