Published: February 20, 2023

Maryland iGaming Could Benefit Equitable Early Childhood Education Trust Fund

Some lawmakers in Maryland believe the state’s recent expansion of gaming to allow retail and online sports betting should be extended to permit interactive slot machines and table games. The possible tax benefit that such iGaming would generate, those lawmakers contend, could help fund the state’s “Blueprint for Maryland’s Future” education initiative.

Passed in 2021 to “transform public education” in the state, the Blueprint for Maryland’s Future will increase education funding by $3.8 billion each year over the next decade — or $38 billion. The initiative is designed to better fund early childhood education, especially for those who have been historically underserved.

Senate Bill 267, introduced in January by Sens. Ron Watson (D-Prince George) and Nancy King (D-Montgomery), is known as the “Internet Gaming — Authorization and Implementation Act.” The legislation seeks to allow the state’s six commercial land-based casinos to operate online casinos in exchange for a $500,000 fee that’s renewable every five years. The state would levy a 15% tax on iGaming revenue.

That new tax benefit, Watson, King, and other supporters of the statute avow, could be directed to the Blueprint.

Funding Concerns

Maryland Gov. Wes Moore (D) has pledged to continue his predecessor Gov. Larry Hogan’s (R) thinking that casino gaming should benefit public education. Moore says the Blueprint for Maryland’s Future is funded through the state’s 2025 fiscal year.

But come 2026, the fund is projected to decrease to $253 million before facing a $1.4 billion deficit in the fiscal year 2027.

“The projections show that we have funding for the first few years but then that funding falls off and we have to be very open-minded and find new sources of revenue. This is one of those,” Watson said last week during a Senate hearing on his measure.

Watson believes there’s an adequate appetite in Annapolis to pass legislation that would ask state voters if they wish to again amend the state Constitution to allow more commercial gambling.

“We are missing one vital component with respect to gaming and that’s the fourth leg of the casino tool, which is iGaming,” Watson continued. “The fundamental aspect of this bill is that it creates a new funding stream for education, and I have deep concerns that we need to do what we can to support our Blueprint.”

How can we use it to generate Black wealth, if that’s possible?” Watson questioned. “How can we make more wealth in our state?”

State fiscal projections estimate that legal iGaming in Maryland could benefit the state as much as $97 million a year. In nearby New Jersey, one of only six states that currently allows iGaming, the state collected almost a quarter of a billion dollars in online casino taxes last year. But New Jersey has about three million more residents than Maryland.

Gaming Critics Push Back

Not everyone is on board with more gaming in Maryland. Stop Predatory Gambling, a DC-based nonprofit that seeks to limit a commercial gaming company’s ability to market towards problem gamblers, told the Capital News Service that Maryland should slow its pace in considering new forms of gaming.

The American Psychiatric Association now defines gambling addiction at the same level as heroin, opioids, and cocaine. But we do not market those products like the state government markets gambling,” said Les Bernal, national director of Stop Predatory Gambling.

“Online gambling is like gambling fentanyl. It’s like the most extreme form. It’s opening the casino right in your bedroom so you can sit there in your pajamas and lose everything,” Bernal declared.

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