Maryland’s Sports Wagering Application Review Commission (SWARC) met Wednesday to discuss draft applications and regulations so the state can move forward with a plan to launch legal sports betting, an effort feeling pressure from the state’s governor to be ready for NFL betting this season.
The primary purpose of the meeting was for commission members to discuss and ask questions about the draft applications and regulations. Based on discussions during Wednesday’s meeting, commission members will make additions or changes to the drafts and decide when to approve the updated final drafts.
Once SWARC approves the draft regulations they’ll be submitted to the Maryland General Assembly’s Administrative, Executive & Legislative Review (AELR) committee for its review and approval. Then after AELR approval the proposed regulations will be published in the Maryland register and there will be an official 30 day period during which the public may submit comments.
“Its our continued hope that we may be able to begin accepting applications in late summer,” said Thomas Brandt, SWARC chairman.
After providing a quick reading of the draft regulations during Wednesday’s meeting, Jim Nielson, deputy director/chief operating officer for Maryland Lottery and Gaming Control Agency, noted important guidelines for submitting an application.
“The most important thing for the SWARC application is it must be timely,” Nielson said. “Once the due date and time are set, if an application or the application fee is not accepted on time, the application is invalid, and people really need to understand that.”
The Maryland Lottery announced on June 16 the Gaming eLicensing system was available to any business interested in pursuing retail or mobile sports wagering licenses.
Much of the SWARC discussion Wednesday involved debate of mobile and retail application drafts provided by Taft, a law firm working with the SWARC.
Fees are $500,000 for a mobile license and $50,000 for a competitive retail license.
Commissioner Bert Hash, Jr. raised concerns about the high cost of licenses.
“It seems like it’s a hefty price to pay once you start in the processing,” Hash said.
Kimberly M. Copp, co-chair of the Gaming Industry Group at Taft, the law firm helping SWARC write the license applications, said Maryland is in the same ballpark on application fee compared to other states.
“The application fees are large to anyone, $50,000 to up to $500,000, which is what the mobile is,” Copp said. “I will say comparatively to other states, frankly it isn’t that. It isn’t as expensive as I’ve seen in other states. For example, we have extremes, the lovely state of Illinois and the Commonwealth of Pennsylvania. Both had very very significant application fees for their mobile applications. For example in Illinois it was a $10 million fee, so comparatively to $500,000 for mobile that seems pretty inexpensive. The state of Tennessee, which only operates mobile, their mobile application fee is $750,000.”
Some of the SWARC members worried that the application materials could be overwhelming to small businesses eager to enter Maryland’s betting market.
“Are we overdoing it?” Brandt said. “Are we making it too hard with all the stuff we’re asking for? … It’s a lot for a restaurant or a startup.”
Commissioner Frank Turner agreed.
“Just listening to what is required to get a license, for the average person it’s going to be overwhelming,” Turner said. “Let’s not fool ourselves. I mean, that is a lot of information. Before people make any firm commitment to filling out that application, they need to know their gonna have a laundry list of what’s gonna be required of them.”
Lawyers with Taft working with SWARC said the lengthy application process serves as a necessary barrier to entry. Michael J. Schaller, an attorney with the firm, says they want to weed out the Maryland businesses interested in sports betting that lack the funds or experience to launch their own MD sportsbooks. The process seems to be working according to comments at the iGaming NEXT New York conference held in May.
“Licensing, it’s a big issue,” Rob Heller, president & CEO of Spectrum Gaming Capital, said at the conference. “I’ve been dealing with companies for decades who want to get into this space. Once they get into the licensing element – and what impact that’s going to have on their company – they say, it’s not worth it.”
The commission could approve the regulations and applications at its next meeting, which is scheduled for July 20, according to a Legal Sports Report article. “There will be 60 mobile and 30 retail licenses available in Maryland.”
