Maryland has a rich gambling history and a long-established horse racing tradition, being home to legendary thoroughbred racetracks like Laurel Park and Pimlico Race Course. But racetracks are not the only locations in Maryland where gambling takes place. The Old Line State has six commercial casinos, the last of which, MGM National Harbor, commenced operation at the end of 2016.
The other five brick-and-mortar gaming venues are located in Flintstone, Perryville, Baltimore, Hanover, and Berlin. The venues provide jobs to over 15,300 Marylanders and reported $1.93 billion in gross gaming revenue in 2021. Numerous gambling options are legally available to residents, including slots, video poker, and tournament poker. The state legislature legalized table games in 2012, allowing for wagers on casino classics like roulette, craps, baccarat, blackjack, and banked stud poker.
Maryland was one of the first states to start regulating daily fantasy sports (DFS) in 2017. While online casinos remain illegal in Maryland for the time being, the state made significant progress toward interactive gambling expansion in 2021. Retail sports betting launched in December 2021, while the first mobile sportsbooks are expected to go live sometime in 2022.
Gambling Laws in Maryland
Marylanders can legally participate in many different forms of gambling, all of which are regulated on a state level under the Maryland Code. The latter is a compilation of all statutes that are presently effective in the state and are categorized based on subject. State-sanctioned lotteries launched in 1973 under the regulation of the Maryland Lottery and Gaming Control Agency (MLGCA).
Slot machines, commonly known as video lottery terminals (VLT), became legal in 2008. Legislators amended the law again in 2012 to allow live table games. Businesses that seek to conduct legal gambling activities must first obtain licenses from the state regulatory authorities. The provision of unauthorized gambling is punishable as an offense under the Maryland Criminal Law.
Maryland Criminal Law
Maryland Code §9-1A-01
Maryland Code §9-1A-05
Maryland Criminal Law
The Maryland Criminal Law §12-101 contains a rather broad definition of gambling devices. The category includes gaming tables for chance-based games where the players risk real money or anything else of value, but excludes billiard games. Bingo games, chance books, paddle-wheel games, and wheel of fortune are also categorized as gambling devices, according to the law.
Carnivals, raffles, bazaars, and all other enterprises where such devices are being operated are labeled gaming events, i.e. individuals and businesses can only organize them with authorization. According to Title 12, Subtitle 1, §12-102, keeping, renting, or using buildings and sailing vessels to run illegal bookmaking or gambling is against the law in Baltimore City.
Committing this misdemeanor can cost the violators up to $5,000 in fines and/or half a year in jail. Playing and betting on illegal gaming devices constitutes a civil offense and comes with fines that range from $500 to $1,000. Individuals who fail to pay their fines within thirty days after being caught may suffer the maximum penalty.
Maryland Code §9-1A-01
Electronic table games and video lottery terminals (VLTs) are legal in the Old Line State and are regulated under Section §9-1A-01 of the Maryland Code. Marylanders voted in favor of the terminals in a 2008 constitutional referendum that capped the maximum number of VLTs to 15,000 across five locations.
The machines are also covered in Article XIX of the Maryland Constitution. The taxes generated from the terminals mostly go toward funding the public education system, including schools and pre-kindergartens. The VTL locations were originally restricted to Baltimore City and the four counties of Anne Arundel, Worcester, Allegany, and Cecil.
Perryville’s Hollywood Casino in Cecil County became the first venue to start offering this form of electronic gaming in 2010. Not long after, it was joined by Ocean Downs, which commenced operation the next year with around 750 machines. The Maryland Lottery Commission originally was the sole owner of the terminals, purchasing and then leasing them to licensees. The Commission eventually decided this approach was way too expensive and transferred the ownership to the gaming facilities in 2018.
Maryland Code §9-1A-05
Another referendum took place on November 6, 2012, when Marylanders subsequently voted in favor of a sixth gaming facility in Prince George’s County. The voters also gave the thumbs up to live gaming tables at commercial casinos and approved round-the-clock operations at all licensed locations.
Section §9-1A-05 of the Maryland Code created the Video Lottery Facility Location Commission, capping the maximum number of licenses to six. Licensees can operate a wide range of classic table games, including roulette, blackjack, poker, mini-baccarat, sic bo, craps, pai gow, and more. In 2016, MGM National Harbor became the sixth and last commercial gaming venue in the state.
The total number of video lottery terminals authorized in Maryland increased from the previous 15,000 to 16,500. A single gaming facility can operate no more than 4,750 terminals on its premises. The facility in Allegany County is the only exception to this rule as it can operate up to 1,500 terminals.
Hanover’s Maryland Live! Casino is the biggest gaming venue in the state, operating more than 4,000 slot machines and over 200 live gaming tables. By rule of thumb, the gaming facilities cannot be located within or near residential areas.
Gambling License Types and Requirements
The six commercial gaming facilities in Maryland have all obtained operator licenses from the local regulatory agency. Permits are issued via a competitive bidding process. Licenses are non-transferable and apply only to the locations for which they have been issued.
Operator Licenses
Supplier Licenses
Employee Licenses
Operator Licenses
Maryland senators and members of the House of Delegates cannot be gaming facility owners or apply for operator licenses. Approved operators must pay $3 million in licensing fees for every 500 video lottery terminals they operate. The licenses have an initial validity of 15 years.
At the end of this period, the operators can resubmit their documents to renew the expired permits for 10 more years. Under §9-1A-23 (a), licensed facilities can operate around the clock. The average theoretical return of the video gaming terminals should be at least 87%.
Supplier Licenses
Companies or persons that distribute, manufacture, or sell gaming machines or equipment to authorized operators must apply for supplier licenses. Interested suppliers must complete the corresponding application form which includes corporate and partnership information. They must also submit information about their past criminal and insolvency history, if any.
Apart from the application form, the suppliers must also provide a set of documents, including financial statements and tax returns for the last five years. The Maryland regulator might waive some or all licensing requirements for suppliers that already have valid permits issued in other states. For this to happen, the Maryland regulator must ascertain the requirements in the other jurisdiction coincide with or are similar to its own licensing criteria.
Manufacturers of gaming machines and equipment must pay $10,000 in fees when submitting their applications. Initial manufacturer licenses cost $5,000 and require renewal once every five years. Companies that only distribute or resell gaming equipment are subject to application fees of $10,0000, while the issuance of the initial permits comes at a lower cost of $1,000. Distributor licenses expire after five years and renewal is again $1,000.
Employee Licenses
These licenses are necessary for employees who are directly involved in the gaming process at licensed facilities. According to §9-1A-14, such workers should prove their probity, expertise, and fitness. Applicants who have been convicted of gambling-related crimes in the US or other jurisdictions within the last seven years will suffer rejection.
All key employees of the gambling operators must submit applications for principal employee licenses, including staff members who service the video gaming terminals. Principal employee licenses have a duration of five years and cost $2,500 upon application. Additionally, there is a $2,000 fee for a background investigation of the key employees plus a $37.25 fee for taking down their fingerprints. Issuing the license itself costs $750.
Taxes on Gambling Operators in Maryland
One thing that sets apart Maryland from other states with regulated gambling is that tax rates vary for each licensed casino. The taxes imposed on video lottery terminals and table games also differ. The commercial operators can retain the following percentages of their VLT revenue:
The profits from table games are taxed at 20%. The Education Trust Fund receives 15% of the tax money under §9-1A-27(d) of the Maryland Code. The counties hosting the gaming facilities receive 5% of the proceeds from table games. The taxes collected from licensed slot machines are allocated as follows:
- 46% – Horseshoe Casino Baltimore (over 2,200 slots and 150 video poker machines)
- 44% – MGM National Harbor in Oxon Hill, Prince George’s County (over 2,200 slots)
- 49% – Maryland Live! Casino in Hanover, Anne Arundel County (over 4,000 slots)
- 39% – Hollywood Casino in Perryville, Cecil County (over 800 slots machines)
- 60% – Rocky Gap Casino Resort in Flintstone, Allegany County (over 600 slots)
- 53% – Ocean Downs Casino in Berlin, Worcester County (over 850 slots)
| Allocation of Tax Money Collected from Licensed VLTs |
| Racetrack Renovation and Maintenance |
1.00% |
| Maryland Lottery and Gaming Control Agency |
1.00% |
| Small-scale local businesses owned by females or minorities |
1.50% |
| Host Counties |
5.50% |
| Horse Race Purses |
6.00% |
| Maryland Education Trust Fund |
32.75% to 47.50% |
Maryland casino operators can use up to 20% of their overall VLT earnings from the previous fiscal year for free bets and other promotions. Gamblers should keep in mind withholding taxes are levied on their winnings but only on condition they exceed $5,000. When so, the casinos must withhold 8.75% from residents of the state and 7.5% from non-resident players.
Responsible Gambling Requirements in Maryland
The state regulator encourages Marylanders to make healthy choices when it comes to gaming. It combats gambling-related harm through raising awareness, research, and employee training. The Maryland Code §9-1A-33 created the Problem Gambling Fund within the Department of Health.
Problem Gambling Fund
Self-Exclusion Database
Gambling Advertising Restrictions
Problem Gambling Fund
All licensed VLT operators must annually pay a $425 fee for every gaming machine they operate within their facilities. Additionally, the local regulator has the remit to impose a $500 annual fee on every gaming table operated by its licensees. All fees are deposited into the Problem Gambling Fund and go toward addiction treatment, support, and prevention.
If any funds remain, the Department of Health may implement them for other addiction services. There is also a dedicated hotline for compulsive gamblers – the service is free, fully confidential, and more importantly, available round the clock.
Free counseling is available to all Marylanders regardless of their financial situation or insurance coverage. Information about the gambling assistance services must be prominently placed at all casino entrances. Licensed operators cannot entice gamblers with free alcoholic beverages. All six casinos diligently work to prevent underage gambling. Persons under 21 cannot access the gaming areas.
Self-Exclusion Database
The Maryland Lottery and Gaming Control Commission (MLGCC) runs a self-exclusion program for the six commercial casinos. Excluded individuals can rely on full confidentiality – only the gambling operators and the MLGCC can access the self-exclusion database. The program only applies to local casinos, although the operators may ban excluded residents from their out-of-state venues at their discretion. MGM Resorts (MGM National Harbor), Penn National (Hollywood Casino), Cordish Company (Live! Casino), and Caesars Entertainment (Horseshoe Baltimore) all honor self-exclusion outside of the Old Line State.
Excluded gamblers who enter any of the six casinos risk being arrested for trespassing. Residents can bar themselves from gambling for two or more years. They may request to be reinstated afterward but the MLGCC has the final say about their removal from the list. Friends and relatives cannot add problem gamblers without their consent. Players must file their applications themselves and submit them in person at the state lottery headquarters or one of the casinos.
Gambling Advertising Restrictions
Gambling operators licensed in Maryland cannot advertise their services in an exploitative manner. The deceptive or inaccurate marketing of gambling products is against state law. The same goes for purposefully targeting underage and self-excluded individuals. All marketing content, be it on billboards, in print, or on radio and television must contain a problem gambling assistance message approved by the local regulator.
Online Gambling in Maryland
Maryland’s gambling legislation disallows nearly all forms of interactive gambling, which means no online slots, table games, or poker for local internet users. At the time of publication, only daily fantasy sports (DFS) are legal and regulated in the Old Line State. Daily fantasy sports are described in §9-1D-01 of the Maryland Code as contests where the participating players “own, manage or coach imaginary teams”.
Participants should know what prizes they are competing for beforehand. Winning outcomes should reflect the players’ relative skill and must depend on statistics generated by real-live teams from professional sports leagues.
Only residents who are at least 18 years old can participate in the daily fantasy contests. Skilled players should be labeled as “highly experienced”. DFS operators cannot offer contests that involve collegiate teams. Players can deposit no more than $1,000 per month, although requesting a temporary increase of this limit is possible.
Sports Betting Regulation in Maryland
Maryland is one of the late arrivals on the US sports betting scene as it legalized this form of wagering in May 2021. State residents approved the measure the previous year via a referendum in November. Around 67% of them voted in favor of sports betting legalization. Less than half a year later, Governor Lawrence Hogan placed his signature on House Bill 940, sponsored by House Delegate Adrienne Jones.
Retail Sportsbooks Partners
License Fees, Taxes, and Other Costs
Allowed Bets Types
Retail Sportsbooks Partners
The legislation authorizes remote and in-person sports betting at licensed retail locations. Maryland Live! Casino (FanDuel), Ocean Downs (TwinSpires), Hollywood Casino (Barstool), Horseshoe Baltimore (Caesars Entertainment), and MGM National Harbor (BetMGM) all operate licensed retail sportsbooks. The first mobile apps are expected to launch sometime in 2022.
License Fees, Taxes, and Other Costs
The first retail sportsbooks started taking bets in December 2021. The landbased facilities have the option to apply for mobile wagering licenses as well. The license fees vary from $50,000 to $2 million, depending on the class category of the permits. Up to sixty remote betting licenses are up for grabs at the cost of $500,000 each.
The permits expire after five years. The renewal costs are equal to 1% of the average annual revenue the operators have generated during the preceding three years. Sports wagering revenue itself is taxed at 15% but licensees can deduct the amounts paid out to winning punters and the free bets awarded to customers. No integrity fees are in place for professional sports leagues.
Allowed Bets Types
Marylanders face a vast range of bet types, including parlays, straight bets, teasers, totals, and props. In-play and exchange betting are also among the available options. Licensed sportsbooks cannot take action on sporting events that involve high-school athletes, however.
Maryland Gambling Regulators
The Maryland Lottery and Gaming Control Commission (MLGCC) is responsible for the regulation of commercial gaming facilities as part of the Maryland Lottery and Gaming Control Agency (MLGCA). The MLGCC comprises a board of seven members tasked with the regulatory oversight of gaming tables and slot machines in the Old Line State. The MLGCC also acts as an advisory board to the MLGCA.
The MLGCC assesses and okays the licenses granted to casino operators and gaming equipment suppliers. As of 2021, the regulatory entity has the added mandate to oversee the regulation of sports betting and daily fantasy sports under HB940 and §9-1D-01. The seven members of the MLGCC serve five-year terms and are selected by the Maryland governor with the Senate’s approval.
One of the seven commissioners is appointed annually to act as a chairperson of the regulatory agency. Each commissioner should be at least 25 years old and a US citizen with a residency of five or more years in the country. Up to five MLGCC members can have the same political party affiliation. At least one member must be a resident of a county that hosts a commercial gaming facility.
Conclusion
Most forms of gambling are already legal in Maryland, with six commercial venues that cater to gaming fans with regulated table games and slot machines. The most recent development in the local gambling industry is the legalization of retail and mobile sports wagering in 2021. We consider this a good sign, so perhaps remote casino-style gaming could also come to Maryland in the next few years.
