Question 2 on November's Ballot Asks MD Voters To Decide The Issue Of Sports Betting

Maryland Votes On Sports Betting In November, But Online Casinos Face Uncertain Future

When the US general election rolls around this November, voters will be choosing more than just their representatives. In Maryland, citizens going to the poll will be called upon to decide the issue of sports betting.

Question 2 has been getting a lot of coverage thanks to an advertising push funded by major gambling companies. Even if it does pass, however, there will still be a lot of work to do before sports betting can launch. Senate Bill 4, which brought the question to the ballot, was very light on detail. All the specifics will have to be worked out next year, assuming the vote passes.

Question 2 asks: 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?

There was a similar effort to trigger a sports betting referendum in 2018. That bill, however, only passed the House of Representatives. It was still on the floor in the Senate when the legislature adjourned on April 9 that year.

This year’s ballot could have included two questions about gambling. It likely would have, had the COVID-19 outbreak not forced the legislature to adjourn early. The second question would have repealed the need to hold a referendum on any future gambling expansion bills. Though that question won’t be on the ballot, the fact that it was being considered suggests an expectation among lawmakers that the state will see additional gambling bills in coming years.

DFS companies pushing for voter turnout

With two months until the election, an organization in favor of the measure has sprung up. Straightforwardly named Vote Yes on Question 2, the organization has launched a website and begun airing television ads.

So far, the ads have targeted the Baltimore area specifically. Soon they will begin airing in the Washington metropolitan area as well, at least the parts of it that lie in Maryland rather than the District of Columbia. These population centers not only contain most of the state’s voters, but are also likely more amenable to gambling to begin with than the state’s more rural areas.

The initiative is backed financially by the two daily fantasy sports giants, DraftKings and FanDuel. They contributed $250,000 and $500,000 respectively. Both companies have had a lot of success branching out from their original niche into sports betting and even into the US online casino space.

These are paltry sums in comparison to their spending on brand advertising, which at one time ran into the hundreds of millions. However, it’s good enough for this sort of targeted campaign. Still, the fact that they haven’t spent more may mean they believe the measure stands a good chance of passing to begin with.

History is on the side of a ‘Yes’ vote

Fortunately, the track record for gambling referenda in other states is a positive one. New Jersey, Colorado, Arkansas, and New York all passed theirs, although some of those votes were very close. Rhode Island required a Supreme Court ruling to decide that sports betting fell under the blanket of previously approved casino gambling and wouldn’t require a new vote.

Sports betting doesn’t always require a ballot question. Where it does, it’s usually because the state’s constitution contains a prohibition on gambling. If the bill necessitates a constitutional amendment, then direct voter approval becomes a requirement. Colorado was unusual in this regard, as it wasn’t sports betting itself, but rather the tax on it that necessitated a referendum under that state’s Taxpayer Bill of Rights.

In Maryland’s case, the requirement is a recent one. It was added to the constitution in 2007 as a compromise when the state legalized the construction of casinos. That bill passed, but only with the promise that any further expansion would receive a public vote. There seems to be regret about that decision now, given this year’s attempt to repeal that same provision.

Such referenda will continue to be a common occurrence. Aside from the states already mentioned, numerous others would need to go through a similar process with any gambling bill. California is foremost among these. It’s a highly valuable state whose path to legalized iGaming and sports betting is riddled with hurdles, including the state constitution.

Maryland sports bill was rushed by need for a ballot measure

Of course, there’s never a guarantee of success when it comes to a public vote. Electorates are fickle, and opponents of legalized gambling can be very passionate about their cause. If overall voter turnout is low, social conservatives rallying against gambling can be a powerful force.

The bigger problem with the need for a referendum, however, isn’t that the vote could fail. It’s that it imposes a specific timeline on the legislature. In Maryland, for instance, such votes can only take place in even-numbered years. That kept sports betting off the table in 2019 and meant that were the bill to fail this year, lawmakers would have to wait until 2022 to try again.

That’s why the bill that did pass is little more than a skeleton. The Senate was still debating the specifics of SB 4 in March when the coronavirus pandemic struck. Forced to cut the session short, senators faced a choice. They could wait until 2022, or they could pass a minimalist bill just to get the question on the ballot. They chose the latter.

What that means, unfortunately, is that voters are being asked to make a choice without knowing exactly what they’re voting on. Aspects like the tax rate, licensing requirements and even what sports are eligible for wagering are all to be determined at some later date. If the referendum fails, it will likely be for that reason.

Are online casinos in Maryland’s future?

The Maryland Senate was also responsible for the bill that would have sought to reverse the constitutional requirement. SB 325 received approval easily in February, with only a single dissenting vote out of 47.

It then passed to the House but was still languishing there when the session came to its unexpectedly early end. Even so, the fact that it existed in the first place is interesting. It implies that the Senate considered the sports betting bill only the beginning of gambling expansion in the state. Had the question made it onto the ballot and received voter approval, we would very likely have seen an online gambling bill materialize in 2021.

That’s the good news. The bad news is that any such effort is now off the table for next year. Whether or not the state gets sports betting this year, efforts for other verticals like online casinos and poker will still require a referendum. That, in turn, means waiting for 2022 as the next chance for putting such questions on the ballot.

The gambling industry is moving so fast at the moment that two years feels like an eternity. That’s especially true for Maryland, surrounded as it is on most sides by states that already have online casinos: New Jersey, Pennsylvania, Delaware, and West Virginia. Maryland gamblers and tax collectors alike may be experiencing significant jealousy of their neighbors by the time that next opportunity comes around.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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