A report released Wednesday by the Sage Policy Group in partnership with the Anne Arundel County Chamber of Commerce warns that legalizing online casinos in Maryland could negatively impact the state. It’s unclear how the report might affect the thinking of state legislators, who are expected to consider online casino legislation during this year’s legislative session.

Sage Policy Group, an economic and policy consulting firm in Baltimore, tried to build off The Innovation Group’s November report about the potential impact of iGaming in Maryland. Sage was founded by Anirban Basu, who served as the chairman of the Maryland Economic Development Commission from 2014-21. 

The consulting firm’s report doesn’t mention the benefits — such as better customer protections and tax revenue generation — of moving Maryland online casino players to a regulated market from the illegal realm. Instead, the report discusses possible pitfalls of legalizing mobile casino apps.  

“The IG Report understates the potential negative economic consequences associated with iGaming, and the legislature must consider that there is more at stake than just gaming taxes collected,” Sage Policy Group’s report said. 

Online casino legalization concerns

Among the top concerns cited by the report was The Innovation Group’s finding that iCasino legalization has resulted in a roughly 10% dip in brick-and-mortar casino revenue across states that have legalized online casinos. 

“Several years ago, policymakers in Annapolis determined that economic and financial life in Maryland would be improved by allowing the development and operations of six casinos,” Basu said in a press release. “Today, those casinos are fully operational, supporting local employment and giving back to communities, generating tens of millions of dollars to support public education and other state priorities each month. IGaming jeopardizes these dynamics when the state can least afford to absorb additional risk.”

The Innovation Group’s report suggests potential revenue decline could be offset by online casino licenses being tethered to physical casino locations. Still, the Sage Policy Group believes the cannibalization impact needs to be discussed by Maryland legislators considering iCasino legalization.

Additionally, the Sage Policy Group reports that indirect harms need to be considered. For example, money spent by customers on online casino games could be spent elsewhere, such as the state’s hospitality industry. A final concern cited by Sage Policy Group is a possible rise in problem gambling, which will likely be a discussion point for legislators in the 2024 session.

Maryland is viewed as one of the states most likely to legalize online casino gaming in 2024, and legislators are expected to soon debate the pros and cons of iCasino legalization. A bill has yet to be officially filed this session, though, and The Sage Policy Group’s report will add to the data points available for legislators to consider.

“We have worked with Sage Policy Group in the past and they have a superlative reputation for researching economic matters that have great potential impact on the state,” Mark Kleinschmidt, CEO of the Anne Arundel County Chamber of Commerce, said in a press release. “Their collaboration on researching this pressing matter brings much needed insight into the potential impacts of iGaming in Anne Arundel County and throughout the State of Maryland.”

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