Regulators from Three Legal Sports Betting States Tell Three Different Stories

Listening to three men discuss their experiences as gaming regulators in their respective states, it was actually a little difficult to believe they all worked at essentially the same job, and that at the beginning of 2021, each regulator’s state was in roughly a similar position.

Understanding that in the U.S. market, gambling circumstances can vary widely from jurisdiction to jurisdiction, it is still true that in Arizona, Louisiana and Maryland, sports gambling was not up and running at the beginning of the year. That was despite voters in Maryland and Louisiana approving sports wagering in referendums a year ago, and in Arizona, there was legislative, tribal and pro sports franchise momentum for sports betting.

However, those three states are in very different places today, although none have legalized real money online casinos. Arizona has both retail and online sports wagering live and is considered a hot market, though no financial figures have been released since sports betting started in September.

Louisiana flipped the switch recently on retail sports betting, issuing 20 temporary licenses to operators in the parishes where voters approved sports wagering in November. But in Maryland, where voters also approved sports betting more than a year ago, the licensing process has been stuck in neutral.

So, at a virtual symposium on Tuesday sponsored by VIXIO Gambling Compliance featuring regulators for those three states, Arizona Department of Gaming Director Ted Vogt was taking a victory lap. Louisiana state senator-turned-chairman of the state Gaming Control Board Ronnie Johns was discussing the merits of taking a deliberate approach. And Maryland Lottery & Gaming Control Agency Director John Martin was trying to explain the quagmire that Maryland sports gambling is in.

Maryland Sports Betting Process Stalled

Martin’s take was the most compelling, considering how voters approved sports gambling by a 2-to-1 margin and are still waiting, mostly in the dark, for sports betting to launch. Much of it, Martin explained, has to do with the Sports Wagering Application Review Commission (SWARC), an independent panel of seven people who are charged with implementing parts of the sports betting legislation that encourages substantial participation by minority- and women-owned businesses. So far, the SWARC has failed to act on Lottery & Gaming’s five recommendations for retail sportsbooks — all of the applicants-in-waiting currently run casinos in Maryland.

The SWARC, whose infrequent public meetings have generally evolved into closed sessions where the commission apparently huddles with lawyers, is scheduled for a meeting on Thursday. It’s no secret that Gov. Larry Hogan is impatient with the SWARC whose members are appointed (two each) by the Democratic speaker of the House of Delegates, the Democratic president of the State Senate, and by Hogan, a Republican, and with the head of the Maryland Lottery & Gaming Control Commission also serving.

Maryland gaming regulators, led by Martin, find themselves trying to do their jobs with the slow-moving SWARC being a drag on movement.

The SWARC is supposed to work in tandem with Lottery & Gaming on licensing, Martin explained.

“And I don’t think I’m talking out of school here. The reality is that we have really yet to work well together,” Martin said. “That’s a work in process. And when you realize we may have another 12 to 24 months of this, we absolutely have to find a way to work with the SWARC to make this happen.”

More Information Sought in MD

If one were to wonder what the SWARC has on its mind, the answer might be in the commission’s most recent directive to applicants, who were deemed qualified by Lottery & Gaming, that they provide supplemental information on ownership. Perhaps, more on that subject will be revealed Thursday, assuming there’s more transparency in that SWARC meeting.

In the meantime, the licensing process in Maryland has dragged on through the NFL season and it would take a major effort to get even the handful of casino-based retail sportsbooks running by the NFL playoffs in January. As for online sports wagering, it could be at least until the 2022 NFL season before that gets underway.

The unique Maryland sports gambling law provides for as many as 60 online licenses, though no one believes anywhere near that number will be issued. The purpose of so many licenses is to let under-represented businesses to get into the sports gambling industry. As an aside, the Maryland gambling law also provides for as many as 47 retail licenses.

“We may be talking to a group of people (applying for licenses) who maybe don’t have any experience with the intrusive nature of what an investigative process is to get into the gaming business and while it sounds appealing to them, (if) they’re not prepared for that it’s going to add time to that process to get them up and running,” Martin said. “And there’s some people within the state here who are advocating for a standing start where we wait and hold all mobile licenses to a future date just to make sure that everyone gets off at the same time. That will add more time to that process if we choose to go that route. But again, we have to await SWARC’s guidelines for the applications for mobile licensing.”

More Legislation Needed in MD?

Dealing with the bottleneck that SWARC has become, both with retail sportsbook licensing and potentially even more so down the road with online licensing, may involve getting the state legislature to make adjustments to the current law.

“If there are things that need to be fixed in legislation, the (General Assembly) session starts in January. So, they’ll have an opportunity to look at it if that be the case,” Martin said. “But there are things in place that are uniquely ours, we own it, we need to work through those things and get those done so that the people in Maryland who voted a year ago — they expect sports wagering and we need to deliver on that. There are always going to be amendments and changes as you go forward in any legislative process.”

Arizona Far Ahead of the Two Other States

While Martin explained the convoluted situation in Maryland, Arizona’s Vogt basked in the clean start-up there. Vogt pointed to streamlined rule-making, legislation that didn’t over-prescribe sports gambling rules, and early dialogue among operators and stakeholders.

“This have gone very well in Arizona. I think we had a very organized rollout even though we had a very aggressive timeframe to complete the rollout,” Vogt said. “The legislation was signed on April 15 and we went live on Sept. 9. We went through the rule-making process and the licensing in 147 days.”

Arizona is taking advantage of NFL betting, where the AGA has seen a big increase in 2021, from the start of the season.

Louisiana has been much slower with its rollout but it does have 20 retail sportsbooks running at temporary facilities working on temporary licenses while the NFL season is in progress. Louisiana tribal casinos were the first to take bets.