What You Should Know About Maryland’s Gambling Referendum

We have horseracing, slots, blackjack and craps, and depending on what Maryland voters decide next month, sports betting could soon be added to the lineup of the state’s gambling options.

A referendum question—“Do you approve the expansion of commercial gaming in the State of Maryland to authorize sports and events betting for the primary purpose of raising revenue for education?”—appears on the November ballot. It could largely put to rest one of the last arguments in that corner of state politics, following voters’ thumbs up for slot machines in 2008 and table games in 2012.

And while pro- and anti-slots forces faced off vociferously for years, this new issue has fueled little public debate heading into the election, said Stephen McDaniel, an associate professor of kinesiology who teaches an I-Series course on gambling.

“It’s just more acceptable now,” he said.

Here is what else you should know before going “for” or “against” on Question 2.

Maryland is late to the betting window
When the U.S. Supreme Court ruled in 2018 that the Professional Amateur Sports Protection Act was unconstitutional and could no longer prohibit most of the country from having sports betting, states rushed to legalize; Delaware did so less than a month afterward, closely followed by New Jersey.

As with slots machines in the past, Maryland is now surrounded by states that either have sports gambling up and running or will shortly, in Virginia, West Virginia, Pennsylvania and the District of Columbia—meaning state residents can cross state lines and bet rather than keep their money at home.

“The argument of leaving money on the table holds water,” McDaniel said.

Few details have been finalized
When Maryland voters approved slot machines more than a decade ago, the ballot measure included lots of specifics over how the program would be executed, including the number and locations of machines. This time, the question seeks only a generic approval of the concept.

“None of this is hammered out,” McDaniel said.

So while the question says the money would be primarily used for education, it’s possible new dollars simply get added into the overall budget and don’t go specifically for school. (A 2018 referendum now mandates slots revenue is essentially handled as an addition to the overall education budget)

“One of the problems that always happens is you play a shell game,” he said. “In a down economy, that revenue goes away.”

It may not be a lot of money
While the state’s six casinos produce hundreds of millions of dollars for its coffers each year ($717.5 million in fiscal 2019), the addition of sports betting likely won’t dramatically increase that, McDaniel said.

Sports betting revenues in Delaware, New Jersey, Pennsylvania and West Virginia have typically averaged only about 2% of the dollars from slots and table games, according to a state Department of Legislative Services analysis. If Maryland allows both casino and mobile sports betting, that will probably result in $18.2 million for education, depending on what percentage goes to the government and what goes to the private companies.

“I don’t know if it will be a huge financial windfall,” McDaniel said.

Private companies would benefit
That’s not to say there won’t be winners, McDaniel said. Fantasy sports sites FanDuel and DraftKings have contributed money to a campaign in favor of the state referendum (headed by former Terp and WNBA player Marissa Coleman) and the ubiquity of point spreads and even whole shows devoted to betting on channels like ESPN shows the potential boost to media companies and sports teams as well.

“Now all of a sudden, your games become more relevant,” McDaniel said. “Much like the stock market, people need information to place their wagers.”

Social services will need support 
Since some sports betting is undoubtedly taking place illegally in Maryland, approving the practice would offer a measure of consumer protection so people will be dealing with legal companies and not bookies behind closed doors, McDaniel said. In addition, the American Gaming Association has started partnering with sports leagues like NASCAR on public service campaigns about responsible betting.

“The money is above ground, and hopefully you can do good things with it,” he said. 

But people will still struggle with addiction, McDaniel said, especially if they can gamble straight from the phone in their hands. Just as is done with funds from casino money now, an additional portion should be dedicated to helping them.

“That’s something that will need monitoring and discussion, he said.”