Maryland’s Joint Audit and Evaluation Committee met last week, with problem gambling among the topics of discussion. The committee seemed particularly interested — and somewhat concerned — about what potential online casino legalization could mean for problem gambling in the state. 

Retail sports betting went live in Maryland in December of 2021, and mobile sports betting platforms launched in the state last November. Meanwhile, Mary Drexler, the program director for the Maryland Center of Excellence on Problem Gambling, is worried about potential legalization of online casino games.

There’s not a ton of concrete data on how mobile sports wagering has impacted problem gambling in Maryland, but Drexler has noticed an increase in people seeking help for problems. 

“My biggest concern with the online and mobile and the potential for iGaming in the next session is we’re moving so fast that we don’t see the full potential of sports betting yet,” Drexler said. “We are seeing an increase in calls, texts, and chats that come into our helpline. We’re definitely seeing the demographic change to a younger adult population, especially minority males.”

iCasino push

Drexler’s concerns come as some state legislators push for iCasino legalization. There was legislation introduced during the state’s 2023 legislative session to legalize mobile casinos, but it didn’t advance far. 

Instead, legislators agreed to have the state lottery find a third party to conduct a study on iCasino feasibility in Maryland. The report, which is due by Nov. 15, should include details on how much revenue online casino gaming could generate for the state. 

Legislation to bring regulated online casinos will likely be floated during the state’s 2024 legislative session. Bringing increased gambling to the state would also require a successful voter referendum in the state’s November 2024 election. 

Some industry insiders believe Maryland is one of the states most likely to legalize mobile casinos in the near future. 

Potential cannibalization?

Members of Maryland’s Joint Audit and Evaluation Committee voiced worry about potential casino revenue cannibalization. The concern wasn’t just about the state’s six retail casinos losing business with customers possibly flipping from visiting physical casinos to using mobile apps, but rather the potential effect on the state’s Problem Gambling Fund. 

Currently, the state’s problem gambling funding comes from brick-and-mortar table games and slot machines. Sports betting tax revenue isn’t earmarked for problem gambling research. 

“There has been legislation introduced to open up the state to internet gaming and you want to think this through,” Sen. Clarence Lam said. “The implications of that could be tremendous. It’s going to cut potentially into the casino industry, which is where most of our funding for the problem gaming fund is currently coming from.”

It’s unclear the extent to which cannibalization fears are warranted, though. Spectrum Gaming analyst Matt Roob recently told US Bets that he hasn’t seen evidence to suggest online casinos cannibalize revenue from brick-and-mortar properties in states that have both. 

It’s also possible that cannibalization fears could be minimized by an iCasino bill allotting a certain percentage of tax revenue to the Problem Gambling Fund.

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