Published: August 6, 2023

Maryland Lottery and Gaming Control Commission Contracts for iGaming Report

The Maryland Lottery and Gaming Control Commission has contracted The Innovation Group to carry out an iGaming study. The goal is to determine whether allowing online casino gambling is in the state’s best interest.

Efforts to authorize online casino gambling with interactive slots and table games sizzled earlier this year in the Annapolis capital. Senate Bill 267, introduced in January by Sens. Ron Watson (D-Prince George) and Nancy King (D-Montgomery), sought to ask state voters if they wished to amend the Maryland Constitution to allow internet casinos.

The measure failed to gain adequate support and was shelved in March. State lawmakers then requested that the MLGCC commission a thorough probe into the merits of iGaming. The thinking is that when the possible tax benefits are presented to the General Assembly, such an expansion of gaming might better find legislative support.

Innovation Wins Competitive Bid

Maryland state gaming regulators earlier this year issued a request for proposals for the iGaming study. The MLGCC said it fielded five submissions.

The Innovation Group’s application, MLGCC officials said in awarding the consultancy to the iGaming project, presented the most attractive offer. The Innovation Group says the online casino probe is expected to cost $86K, which is less than the $100K budgeted by the MLGCC.

The Innovation Group’s proposal is very strong,” said Jim Nielsen, deputy director and chief operating officer of the MLGCC’s Gaming & Regulatory Oversight Division. “They have a good team and have done this kind of work before. We’re very comfortable with them as an organization.”

The Innovation Group lists on its website that its services include market reports for “iGaming and emerging technologies.” The consultancy explains that such reviews include insights on market research and analytics, regulatory best practices, and iGaming strategies.

Among The Innovation Group’s long list of clients are Caesars Entertainment, MGM Resorts, The Cordish Companies, Penn Entertainment, and Churchill Downs. Each of those gaming operators runs a land-based casino in Maryland.

iGaming Outperforms Sports Betting

Maryland already has legal online gambling by way of its mobile sportsbook platforms.

Licensed sportsbooks began taking remote bets from inside the state via the internet on Nov. 23, 2022. Maryland online sports bettors have since been wagering about a quarter of a billion dollars each month.

Because sports betting is a small-margin business for the gaming industry, gross revenue from sports betting, inclusive of retail bets, totaled $143.8 million through six months of 2023. That’s the taxable win amount sportsbooks reported after paying out winnings and deducting promotional play.

iGaming generates significantly more income for operators than sports betting does. In New Jersey, for example, a state with online sports betting and iGaming, oddsmakers won about $763 million off of bettors in 2022. Garden State iGaming platforms generated revenue of more than $1.6 billion.

New Jersey’s online casino tax benefit was just shy of $250 million. New Jersey’s tax benefit from retail and online sports betting was $97.8 million.

Maryland has about three million fewer residents than New Jersey. But residents in the Old Line State have the highest median household income in the U.S. The average family in Maryland earned nearly $99K last year.

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