Maryland in the Online Gambling Mix?

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Update August 8th: Online gambling will not be a part of the special session in Maryland.
Update August 5th:  Speaker Busch is now downplaying the role online gambling might play in the session and Maryland Senate is also sending negative signals.  No one has yet rung the death knell, however, so we’ll continue to keep you posted.

Original Story (August 3rd, 2012)

Cliffs: Maryland may consider a plan to issue online gambling licenses to casino operators in the state during an upcoming special legislative session dealing with gambling expansion.

Expect this scenario (or something quite similar) to play out in more and more states in the months ahead.

Online gambling suddenly / surprisingly / cryptically appeared on (or at least in the vicinity of) the Maryland legislative agenda this week, thanks to State House Speaker Michael Busch (D-Anne Arundel).

Details from the Washington Post (via AP):

Michael Busch, D-Anne Arundel, briefly noted the possibility of developing an online gambling component in a memo to the House Democratic Caucus in an update of plans for the session, which is scheduled to begin next Thursday. Lawmakers also will be considering whether to allow table games like poker and a new casino site in Prince George’s County.

The Speaker’s memo as reported does not directly mention online gambling, but does obliquely refer to “other forms of gambling” permitted by “other jurisdictions in the Mid-Atlantic.” Most have read that as code for “online gambling now allowed by Delaware” and a spokesperson for Busch confirmed that the Maryland House “will consider Internet gaming among a menu of options” in the upcoming special session of the Maryland General Assembly.

Busch was reportedly encouraged to include Internet gambling in the special session discussions by the Cordish Companies, operators of the Maryland Live! Casino. Cordish is apparently seeking a variety of concessions in exchange for signing off on land-based gambling expansion plans that will place a competing casino in a county bordering Maryland Live.

The momentum of the Maryland story grew quickly, prompting local media to reach out to Maryland Gov. Martin O’Malley. That’s when things really started to get interesting.

As Michael Dresser at the Baltimore Sun reported:

Thursday, a spokeswoman for Gov. Martin O’Malley gave the proposal a little more momentum when she refused to rule out inclusion of Internet gambling in an overall casino expansion bill.

“There have been conversations about it,” said Raquel Guillory, O’Malley’s communications director. “Nothing is final yet on the bill. It’s a work in progress.”

The sudden emergence of the Internet gambling issue raises the possibility that the General Assembly could approve a radical change to Maryland’s gambling program with little more than a week for public discussion and limited time for hearings.

So is this a trial balloon or something more substantial? It’s difficult to say. Maryland could be feeling genuine pressure from New Jersey and Delaware (and potentially the US federal government), pressure that is now causing the state’s gambling industry and their political supporters to accelerate Maryland’s progress toward regulated online gambling.

If it is a trial balloon, the message coming back from the local media seems to be “not now and not this way.” A Baltimore Sun editorial published the day after the news broke slammed the move in no uncertain terms:

Internet gambling wouldn’t drive economic development in the way adding a new casino or table games would. It would produce no construction jobs and few jobs for people to run it. It wouldn’t draw tourists to the state. What it would do is empty more money out of Marylanders’ pockets, and unless we get it right, the primary effect could be the enrichment of casino owners.

This is one race in which Maryland does not need to be among the first. The Prince George’s casino issue has come to a head because proponents want to get it on the ballot this fall. But it’s not at all clear that allowing Internet versions of forms of gambling that are already legal in Maryland would require a voter referendum. In fact, the state lottery is expected to begin online ticket sales early next year, no referendum required. Internet gambling is something Maryland’s legislature needs to talk about, but it absolutely shouldn’t be on the agenda for next week’s special session.

One way or the other, we won’t have to wait too long to find out what role – if any – online gambling will play in the special session. The session begins on August 9th.

Any gambling expansion in Maryland must be approved by public ballot, so there are still a number of significant steps before legislative interest can develop into an actual market for online poker or online gambling.

- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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