What to expect now that mobile sports betting is just days away

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State regulators on Wednesday approved applications from 10 mobile sportsbooks. The move sets the stage for Marylanders to be able to place legal bets on their phones for the first time, perhaps as early as next week.

The applications represented an interesting mix of well-known players in the industry and local companies. The Sports Wagering Application Review Commission (SWARC) unanimously approved all 10 with virtually no public discussion. Applicants underwent a rigorous scrutiny before voting, officials said.

The vote was an important step on a time-consuming journey. The Supreme Court paved the way for states to allow sports betting in 2018. Maryland voters approved a referendum on the issue in 2020, and a small number of businesses — mostly casinos — began accepting on-site wagers on sporting events last December.

But bettors have been eagerly awaiting the ability to place bets on their mobile devices any time of the day. Applicants admitted Wednesday must undergo a system test by the Maryland Lottery and Gaming Agency. As soon as this happens, they get the all-clear.

The kickoff is expected to come in time for the Thanksgiving Day roster of NFL games.

“Mobile will account for the bulk of betting from sportsbook and we are committed to enabling Maryland to enter this market,” said SWARC Chairman Tom Brandt. He acknowledged that “it took us a while to get to this point.”

Maryland has left other states behind in building its sports betting industry. Because lawmakers were keen that the state has a diverse group of license holders, regulators had to conduct a study to determine what barriers to entry might exist for minority- and women-owned businesses.

To further those goals, some early applicants followed a 95/5 model, in which an established sports games company owns nearly all of the Maryland start-up and a local partner comes on board as a minority shareholder.

It was not immediately known how many of the original 10 mobile gaming companies have minority or female ownership, but Frank Turner, a former state delegate and SWARC member, said several do. These include: Long Shot’s, a women-owned sports bar in Frederick, and minority-owned Riverboat on the Potomac in Colonial Beach, Virginia (but technically a Maryland business because it’s on the Potomac River).

“The commissioners have certainly made a good faith effort to encourage people to participate in the process,” Turner said. “I think we’ve done relatively well considering how far we’ve come.” Lottery and Gaming is still reviewing 11 other applications, he noted.

The operators approved by SWARC (and their operating partners) are:

  • Arundel Amusements, Inc. (Bingo World with Rush Street Interactive)
  • BetMGM Maryland Sports (MGM National Harbor)
  • Crown MD Online Gaming (DraftKings)
  • CZR Maryland Mobile Opportunity, LLC (Caesars Entertainment/Horseshoe Casino Baltimore)
  • Greenmount OTB, LLC (with PARX Interactive Maryland)
  • Long Shot’s, LLC (with BetFred)
  • Maryland Stadium Sub (FedExField, home of the NFL Washington Commanders with Fanatics)
  • PENN Maryland OSB (PENN Entertainment/Hollywood Casino Perryville)
  • PPE Maryland Mobile, LLC (Live! Casino & Hotel with FanDuel Sportsbook Maryland)
  • Riverboat on the Potomac (with PointsBet)

A challenging climate for smaller operators

Now that sports betting legalization is just days away, industry analysts said Maryland can expect an onslaught of advertising and marketing efforts. Operators believe that being the first app on a player’s device can pay off.

“This is the time for operators to go through a very strong customer acquisition phase,” said Matt Schoch, senior content manager at PlayMaryland.com, an industry website. He said the NFL caps the number of gambling ads on its television shows, but regional sports networks don’t. “That’s when it’s a bit of a free-for-all,” he said.

The commissioners were told that many of the Maryland applicants are extremely well capitalized, and in some cases have cash holdings of $1 billion or more. The financially strong companies have clear advantages over the upstarts, said Schoch. One is their established brand ID; Another reason is their ability to bear the upfront costs associated with acquiring customers.

Most major companies offer incentives – often referred to as “risk-free” or “free” bets – to attract newbies. “These deals don’t get any better for the weather,” said Schoch. “If you’re going to sign up for apps, you should do so during the introductory phase.” (He and other experts warn that consumers should scrutinize the fine print on such offers.)

Some companies have moved away from “free” betting and started offering three-month subscriptions to services like NBA League Pass, the professional basketball streaming service.

According to iGamingNext.com, the top seven companies – FanDuel, DraftKings, BetMGM, Caesars, BetRivers, Barstool and PointsBet – control almost 97% of the nationwide action. That doesn’t leave much room for smaller operators.

“It’s an enormous challenge. We haven’t seen many of these operators succeed,” Schoch said. β€œThe name brands get all the action. The medium-sized to smaller brands are not getting the volume they need.”

“Sports betting is a low-margin industry for operators,” he added. “It’s a difficult business to run.”

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