SWARC approves regulations and betting partners

The Sports Wagering and Regulation Commission (SWARC) has made a decisive step toward the eventual launch of mobile sports betting in Maryland. It has been a long time in the making and not without difficulties but the commission finally approved the online sports betting regulations and applications proposal during their recent monthly meeting in July.

The details of the regulations and applications draft have now been posted on the Maryland Lottery Gaming Control Commission (MLGCC) and the commissions’ websites.

Agreed licensing process in Maryland

The commission have clarified the licensing process of mobile and class B licenses. As unanimously agreed upon, before any licenses are granted, they must be applied for, and approved by, through both the SWARC and MLGCC.

As it stands, the SWARC will be able to issue up to 30 Class B licenses and 60 mobile licenses. The licences will be awarded according to a competitive bidding process that has been established by the commission. Despite the many consultations the commission has made, a criteria regarding the award system ensuring gender and race equality has not yet been made.

SWARC is mainly responsible for issuing licenses to selected business. After that, their active role on licensing ceases. From there onwards, the MLGCC takes over and is responsible for vetting all the eligible licenses. Approval will be concluded only once a background check has been done. In addition, the approval process by MLGCC will also include checking SWARC applications information.

The lottery commission is also responsible for the day-to-day regulation of all the businesses that will qualify to operate in Maryland.

Interested applicants can apply for Class B and mobile licenses through an eLicensing platform established by MLGCC last June.

The background application information is available on MLGCC’s website while the SWARC application process will be published some time soon.

Recent changes in regulations and applications

Since the previous meeting several changes and adjustments to the format were made to the proposed regulations and applications. Stylistic changes included capitalizing the word applicant throughout were also made. 

During the meeting Jim Nielson from MLGCC requested five main changes be made:

1. Personal net worth to be included;
2. Requirement for submission of application to the eLicensing portal for background checks reduced from 30 days to 14 days;
3. Additional definition on full-time equivalent employees in order to determine whether a facility is going for a Class B-1 or Class B-2 license;
4. Any disciplinary actions and fines that applicants may have received in other jurisdictions must be included;
5. A 5% equity ownership requirement.

SWARC’s chairman, Thomas Brandt, requested further clarifications on each of the above points by adding several key comments. For starters, all applicants were to demonstrate that 5% of their equity is direct or indirectly owned by individuals. The individuals must have a personal net worth of $1.8 million.

Brandt further stated that the amount may seem high, but it complies with the sports wagering requirement of managing huge cash amounts.

Jim Nielson also clarified why the submission time frame had been reduced, stating that as applicants already had enough time to start of applications, two weeks was enough.

Next steps

The approval of the proposed regulations and applications is a major step forward, however it needs to be followed by a series of other events. 

• Submission to Maryland Legislature’s Joint Committee
• 30-day public comment period
• Complete industry review and approval
• Review by other entities
• Final approval

Firstly, the proposed changes will be submitted to the Maryland Legislature’s Joint Committee on Administrative, Executive, and Legislative Review. The review should yield an emergency approval that will be followed by a 30-day public comment period before final approval.

With this, prospective applicants can begin filling in their applications in line with draft applications along with existing lottery regulations and probable SWARC regulations. As stipulated, the applications will be submitted through the eLicensing portal for background information check.

Once the emergency SWARC regulations have been approved and an industry analysis has been completed, a date for the formal application and payment of fees will be set.

When all this is completed a time frame for additional actions may also be created.

However, chairman Brandt still cautioned on probable changes as the commission is legally required to conduct an industry analysis. The analysis is meant to determine whether a race and gender criterion should be used in the application and evaluation processes.

However, other entities, including the Office of the Attorney General, have not yet completed their review on a draft of the Industry analysis that has been submitted.

The next meeting is scheduled for August 17. Nonetheless, there is a high likelihood that an emergency meeting will be called before then. The commission has promised that is fully committed to have online sports betting in Maryland however the deadline it previously set for September is unlikely to be met.