Maryland: No vote on sweepstakes ban or historical horse racing machines in House Committee

March 12, 2025

In a two-part hearing on Tuesday (11 March 2025), Maryland’s House Ways and Means Committee declined to take action on two significant gambling-related bills: one proposing a ban on sweepstakes platforms and another seeking to allow historical horse racing (HHR) machines at the state’s off-track betting (OTB) facilities. The committee had another voting session scheduled for Wednesday morning, but neither bill appeared on the agenda, leaving both proposals in legislative limbo.

So far, no gaming-related bills have advanced this session, including a highly debated proposal to legalise online casinos. Lawmakers and stakeholders remain divided on the issue, with no clear path forward.

Sweepstakes ban

The first bill under discussion, HB 1140, aimed to prohibit sweepstakes platforms, which are currently unregulated in Maryland. These platforms operate without paying taxes to the state, drawing criticism from casino operators who argue they create unfair competition.

However, sweepstakes proponents defended their platforms, claiming they are already legal under Maryland’s commercial code. Josh White of KO Public Affairs, representing Australian-based sweepstakes operator VGW, likened the platforms to popular games like Candy Crush.

“Both are always free to play, but consumers can purchase game tokens for enhanced play,” White testified. He stressed that sweepstakes platforms use promotions “in the same way that McDonald’s or Microsoft does,” as a marketing tool rather than a gambling mechanism.

Brad Rifkin, testifying on behalf of gaming giant Light and Wonder, countered this argument, stating, “If it walks like a duck and quacks like a duck, it is a duck. It’s an illicit game.” Rifkin estimated that Maryland’s illicit gaming market, including sweepstakes and offshore platforms, is worth approximately $6 billion annually.

Jeff Iffrah, an attorney representing the Social and Promotional Gaming Association (SPGA), argued that the language in SB 860—a similar bill advanced by a Senate committee on 7 March—is overly broad. He warned that it could inadvertently ban online casinos while leaving the black market untouched.

“The bill is unnecessary and would do away with something that is already legal,” Iffrah said. His testimony sparked interest among lawmakers, with Delegate Jason Buckle questioning whether the legislation could be refined to target only pure online gaming platforms without affecting legitimate consumer promotions.

Historical horse racing machines

The second bill, HB 1048, sought to authorise HHR machines at five OTBs across Maryland. Proponents argued that these machines are essential for the survival of OTBs, which have struggled since the launch of online sports betting in November 2022.

Alyse Cohen, owner of Long Shot’s OTB in Frederick, testified that handle at her facility has dropped by 33 percent since sports betting went digital. “We were once hopeful that retail sports betting would provide a much-needed sales boost,” she said. “Instead, we’ve seen the entirety of sports betting go online.”

Leslie Feliz of the Greenville Consulting Group, representing Chesapeake Gaming Group, echoed Cohen’s concerns. “The reality is that retail sportsbooks are falling short, and online sports betting has made it very difficult for smaller operators to compete,” she said.

Maryland’s sports betting law includes provisions to support minority-owned and small businesses, but the shift to online wagering has disproportionately impacted these operators. OTBs, many of which are minority-owned, argue that HHR machines would provide a much-needed revenue stream.

Casino opposition

Maryland’s casino operators, including MGM and Penn Entertainment, strongly oppose the introduction of HHR machines at OTBs. They argue that the machines mimic traditional slot machines and would create unfair competition, especially given the disparity in tax rates.

While casinos pay a tax rate of over 40 percent on slot machines, the proposed tax rate for HHR machines is just 15 percent. Marta Harding, representing MGM, testified that the player experience on HHR machines is indistinguishable from that of slots.

“The way that HHR machines operate is really not the issue,” Harding said. “The issue is the player experience, and the player experience is the same.” She warned that introducing HHR machines would threaten the state’s existing gaming model, which has contributed significantly to Maryland’s education trust fund.