By Charlie La Vine, GW Law 2L
Maryland residents await the full roll-out of sports betting, including popular mobile betting. However, the state has only begun to license a limited number of sports betting venues.
Many Marylanders attribute the delay to a specific provision in the sports betting law, HB940, requiring companies to incorporate women and minorities into their business model. What was once envisioned as the bill’s shining feature could now be perceived, by some, as its Achilles heel.
The ambiguity of some of the terminology within HB940 could be the crux of the problem. Specifically, some believe the gender and racial quotas noted in the law are not clearly defined, and thus, may be deemed unlawful for such ambiguity. However, the Maryland’s Sports Wagering Application Review Committee (SWARC) is trying to get out ahead of this issue by publishing an advisory opinion to bring clarity to the language surrounding the minority and women requirements.
Not everyone thinks such a clarification is necessary. According to Jeff Ifrah, of Ifrah Law, a Washington, D.C. based law firm with expertise in the gaming industry, the statute is already clearly worded. “Anyone applying for a Class B retail (not already named in the bill) or mobile license must put forth a good faith effort to include minority/woman partners in their sports wagering business,” stated Ifrah. Furthermore, “It is clear that those who have added minority/women partners will be given priority for licensing over applicants that do not.”
Ifrah thinks it is still an open question about what constitutes a ‘good faith effort’ and what percentage of minority/woman investment would actually satisfy the SWARC. “I believe after the diversity study is complete, and the SWARC evaluates its findings” the good faith effort will be understood by the applicants.
As the law reads today, “[SWARC] must consider allowing early access to the mobile sports wagering market to entities with a meaningful partnership with minorities, women, and minority and women-owned businesses.” (emphasis added[MC1] ). It also says that “an applicant for a sports wagering license seeking investors must make serious and good-faith efforts to solicit and interview a reasonable number of minority and women investors”. (emphasis added)
With phrases like “meaningful partnerships,” “serious and good-faith efforts,” and“reasonable number” left undefined, this may be causing a delay in some companies’ willingness to apply. Meanwhile, others applying believe the wording of the statute simply outlines what future applicants should strive for.
No matter one’s view, the Class B businesses that do apply must meet the Minority Business Enterprise/Women Business Enterprise (MBE/WBE) requirements as written in the law today.
One good sign that Class B companies will get some clarity soon occurred on November 18, 2021, when the Maryland Lottery Gaming Control Commission approved some Class A applicants. This will clear up some time needed, by SWARC, to “focus on examining what (if any) gaps there are in racial and gender equality in sports betting,” says Ifrah. He added that “they cannot move forward until this study is complete and analyzed.” Once completed, it is believed that SWARC will be able to move forward on the Class B licenses (small business entities) and mobile sports betting applications.
As many Marylanders await the completion of the study, Class B companies are in a holding pattern. Since the lawmakers have stated that the intent [of HB940] was “to [maximize] the ability of minorities, women, and minority and women-owned businesses to participate in the sports wagering industry,” they know what is at stake. While this intent remains a worthy goal, it is also proving to be challenging to determine how applicants can position themselves to benefit from this expressed aspiration.