Maryland lawmakers are once again evaluating whether online casino gaming should become legal in the state, with a proposal that supporters say could generate significant tax revenue while opponents warn about potential harm to existing casino operations and local jobs.

Sen. Ron Watson has introduced Senate Bill 885, a measure designed to authorize online casino and online bingo gaming under the oversight of the Maryland Lottery and Gaming Control Commission. The proposal arrives as the state confronts mounting fiscal challenges and lawmakers search for new revenue sources.

Watson framed the measure as a way to modernize gambling regulations while directing funds toward public programs. During a hearing before the Senate Budget and Taxation Committee, he pointed to the state’s growing fiscal pressures. “The Spending Affordability Committee was told we have to deal with a $2.3 billion shortfall next term. The gap widens to $3 billion in 2029, and by fiscal 2031 the gap is projected to be $4.1 billion,” Watson said.

Revenue Potential and Licensing Structure

The legislation proposes a regulatory framework allowing certain operators to run online casino platforms and bingo games. Under the bill, licenses could be issued to video lottery operators or to a “sports wagering licensee who is both a sports wagering facility licensee and a mobile sports wagering licensee”.

SB 885 outlines specific licensing costs and tax rates. Full iGaming operators would pay a $1 million license fee, while companies offering only live dealer games would pay $500,000. Online bingo licenses would also cost $500,000. Each license would remain valid for five years, with renewals set at 1% of average annual proceeds.

The measure also introduces a tax structure for operators. Live dealer games would face a 20% tax on revenue, while other online casino games would be taxed at 40%. Watson estimates the system could generate roughly $250 million annually and around $1.5 billion over five years.

He argues the state already loses revenue due to unregulated gambling websites accepting Maryland players. “Not $1 of the projected $200m spent illegally comes back into our state to support our schools, police, and infrastructure or our addiction services,” Watson said.

The bill also includes consumer protection provisions. Operators would be required to display the 1-800-GAMBLER helpline prominently and provide clear information about the risks associated with gambling. The legislation prohibits credit card deposits and establishes penalties of up to $1 million for tampering with gaming systems.

Watson said the proposal reflects a broader effort to address activity that already occurs online. “What this bill does is simply modernize the delivery of games that already exist,” he said. “The same as we did with sports betting a few years ago.”

Regional Competition and Legislative Context

Watson also pointed to developments in neighboring Virginia as an additional reason for Maryland to consider the proposal.

“So, what has changed from the last time I introduced this bill?” Watson asked. “One word: Virginia.”

Virginia lawmakers have debated multiple proposals to authorize online casino gaming. Two measures, House Bill 161 and Senate Bill 118, advanced through their respective chambers earlier this year. “Now that Virginia has come along and their iGaming legislation has passed both chambers. The question is, why not Maryland?” Watson said, as reported by SBC Americas.

He noted that Virginia plans to study the potential effects of online casinos over a three-year period, including whether internet gaming might affect traditional casino revenue. Watson maintains that the digital market may attract different players than land-based venues. “Online casinos attract different consumers compared to land-based casinos,” he said.

Another regional factor involves the possibility of a new casino project in Fairfax County, Virginia. Watson said such a development could affect business at MGM National Harbor in Maryland, which currently draws a large share of customers from Virginia.

“That is what cannibalization really, really is,” Watson said of the Virginia casino proposal. “This iGaming bill allows Maryland to remain competitive.”

Opposition and Concerns About Social Impact

Despite the projected financial benefits, the proposal faces opposition from several local officials and industry representatives. Critics warn that moving casino gaming to online platforms could reduce traffic at physical venues and weaken local economies.

Ocean Downs Casino and officials in Worcester County have voiced strong concerns. “Maryland’s gaming industry was built to support jobs, tourism, and local communities,” Bobbi Jones, general manager of Ocean Downs Casino, told WBOC. “iGaming shifts gambling to phones and living rooms while putting those jobs and community investments at risk. That’s not the direction Maryland should take.”

County leaders also noted the economic role Ocean Downs has played since opening in 2011, including support for local projects such as police equipment and education programs.

Some critics also raised concerns about gambling addiction. Jessica Wellman of the Campaign for Fair Gambling cited research suggesting problem gambling rates in states with online casino gaming average around 6%. Maryland’s rate currently sits near 5.7%, she said.

Watson maintains that regulation offers stronger protections than the current situation. “So, the question is not whether or not iGaming exists, because it does,” he said. “The question is whether or not we’ll regulate it responsibly, or will we keep pretending that prohibition is working when it clearly is not?”

The legislation has already passed its first reading and remains under review by the Senate Budget and Taxation Committee. If lawmakers approve the measure and it becomes law, Maryland voters would ultimately have the final say on legalization through a public referendum.

Meanwhile, policymakers continue to debate whether online casino gaming represents a viable solution to the state’s fiscal challenges while balancing economic and social considerations.