Maryland Online Gambling
Using performance data from six states that currently have legalized online casinos, a new report released this month says Maryland could generate $533.4 million in gross revenue from online gambling starting in 2026.
Two state Senators introduced a bill in January to try and get iGaming started in Maryland. Introduced by Sen. Ron Watson (Democrat, Prince George’s County) and Sen. Nancy King (Democrat, Montgomery County), the bill failed to gain any traction.
To help give the bill legs and move forward, possibly in 2024, the Maryland Lottery and Gaming Control Agency awarded a contract to The Innovation Group to perform a study on iGaming for the Maryland General Assembly’s Budget Committees as legislation relating to iGaming is contemplated.
As the industry matures in Maryland, the initial $533.4 million in 2026 from iGaming would grow to more than $900 million in gross revenue (or “casino win”) in 2029, according to The Innovation Group report.
“We arrive at a stabilized annual forecast of more than $900 million in gross revenue,” the report says.
The proposal to launch Internet gaming follows behind the state’s rollout of retail sports betting in December 2021 and then online/mobile sports betting in November 2022.
At a glimpse, Maryland sports betting market had the best month in its history in October, with 13 retail and 12 mobile sportsbooks handling over $483 million in bets from users. Online/mobile sports wagering accounted for 95.9% of the total at $463 million.
Maryland is a prime candidate for online casinos, according to Watson and King. Its proximity to New Jersey, Pennsylvania, West Virginia, and Delaware, which all have online casinos, will possibly help get a Maryland online casino referendum passed in 2024.
Many states have recognized gaming’s ability to raise state and local revenues.
Impact on Existing Casinos
“To estimate the impact of iGaming on land-based casino Gross Gaming Revenue, we compared brick-and-mortar casino performance in 2019 and 2022 between states with and without iGaming,” the report says. “In all, we observed 2% same-store casino revenue growth in non-iGaming states, versus an 8.2% decline in iGaming states, suggesting a cannibalization rate of approximately 10% of casino gaming revenue.”
Since Maryland’s casino revenue is just over $2 billion annually, this would amount to a loss of more than $200 million in casino revenue, against a gain of $900 million in iGaming revenue.
“Because of the expansion of distributed forms of land-based gaming in West Virginia (taverns) and Pennsylvania (truck stops), and the addition of Category 4 gaming licenses in Pennsylvania, we believe that the 10.2% impact is slightly overstated and that the actual effect is more likely between 8% and 9%,” the report says.
During their research and interviews with other iGaming state officials, it was suggested that Maryland consider adopting aspects of the New Jersey and Michigan legislation, as those states have fostered healthy and burgeoning iGaming markets that produce economic benefits for both the state and the state’s existing casinos.
Key aspects of the bills in those states include licenses tethered to existing brick-and-mortar casinos, a reasonable tax rate, gaming board oversight, and reasonable responsible gaming requirements.
The Innovation Group report provides a look at iGaming revenue per adult from 2022 in existing online casino states with legal online poker and casino gaming. New Jersey led the field with $231, followed by Michigan ($209), Pennsylvania ($138), West Virginia ($83), Connecticut ($83) and Delaware ($17).
If there is any hope in launching iGaming in Maryland, Senators will need to introduce a new bill for the 2024 session, which convenes on Jan. 10. If an iGaming bill is passed in 2024, Maryland voters will have their say during the November election.
