Maryland gambling regulators blocked a request from sports betting firms to ease promotional offers' rules

Sports betting operators in Maryland urged regulators in the state to withdraw rules that require them to submit descriptions of promotional offers for inspection at least two days before putting it into effect. These rules, brought on by the Maryland Lottery and Gaming Control Agency, are intended to safeguard bettors from misleading promotional offers.

In their efforts to expand market share, mobile sportsbooks are seeking to make more attractive offers to players, including so-called "free" or discounted bets to lure new customers. Such promotions are often advertised in oversized or bold lettering. However, it is the fine print that becomes the subject of scrutiny from state regulators for restrictions. 

According to state records obtained by The Baltimore Sun, the companies specifically asked Maryland to lift a regulation that requires them to submit a description of any promotional offer, along with its terms and conditions, at least two days before going into effect. 

The operators instead requested a regulation that requires them to tell the state about a promotion within five business days of launching it, meaning that there would be "no notice or time for advance review."

The industry in their proposal said: “The submission of promotions prior to advertising/marketing efforts limits the ability to adequately consider promotions because of unknown variables which often accompany events that are attractive for sports bettors.” 

As an example, the companies noted that the requirement of two days' notice would prevent them from immediately offering promotions targeting bettors in certain areas right after their teams advanced to the NCAA basketball tournament.

The agency rejected the request in May, two months after it was first made, according to the cited source. It separately denied a request from Boston-based DraftKings to roll back a regulation that limits the total dollar amount of free bets the companies are permitted to offer in the state each year. The cap is decided by a formula based on how much taxable revenue each company generates in the prior year.

As per the Baltimore Sun's report, the two proposals are among those listed on an undated spreadsheet titled “Collective Regulation Change Requests.” This includes suggestions the Maryland Lottery and Gaming Control Agency receives from licensed operators and sports betting equipment suppliers. The agency annually invites gambling establishments to propose changes to regulations they believe are unnecessary or should be revised. 

Speaking to the Baltimore Sun, the agency’s director, John Martin, said that regulators “seek a balance under which sportsbooks can prosper amid a fair climate for bettors.”

Martin said: “We’re eager for Maryland’s sports wagering industry to thrive and generate funding for education, and we’re also mindful of consumer protections. We provide guidance to sportsbook operators so they may bring a variety of promotions to the market. At the same time, we feel that reviewing the details of promotions before they launch is a reasonable step that’s in the best interests of consumers.”

Maryland Lottery and Gaming Control Agency Director John Martin

Maryland sports betting keeps growing

Sports betting companies handled over $328 million in wagers in Maryland in April. The state includes 10 mobile sportsbook operators, in addition to 10 brick-and-mortar outlets, including Horseshoe Casino Baltimore, Live! Casino and Hotel in Hanover, MGM National Harbor in Prince George’s County, Ocean Downs Casino in Worcester County, and Hollywood Casino Perryville.

The casinos in Maryland started accepting sports wagers at their properties in December 2021. Mobile betting, which includes placing bets on computers, phones, or other devices, began in November 2022 in the state.

But right before the mobile launch, regulators in Maryland deemed the language of betting companies promising wagers to be ‘risk-free’ as predatory. Michael Eaton, director of audit and regulatory compliance for the Maryland gambling agency, in an email at the time wrote: “We have deemed the ‘Risk-Free’ language used in sports betting promotions as predatory. Going forward it shall not be allowed to be included in any Maryland-specific advertising or promotions.”

As of 2023, which is their first full year of operations, sports betting companies in Maryland are allowed to offer unlimited promotional bets. After that, free play offers will be limited to 20% of their sports wagering proceeds from the previous year. 
As per regulators in Maryland, the cap is required as abundant free bets would reduce the amount of revenue it can tax.