Maryland sports betting commission adds diversity requirement for applicants to receive mobile licenses

The plan, submitted to the commission known as SWARC within 30 days after licensure approval, should include strategies to obtain a diverse group of owners or contractors, conduct diversity-related events and proposed timelines and benchmarks to achieve diversity objectives.

An applicant must also check “yes” to three boxes that summarizes it will make a “good faith effort” to meet the diversity objectives, report diversity metrics to the Maryland Lottery and Gaming Control Commission and make its diversity plan available to the public. “SWARC will consider any type of diverse group where an Applicant can demonstrate that an individual has been disadvantaged and, therefore, inclusion of the individual as a participant in the Diversity Plan would be beneficial,” according to the addendum.

A commission member asked what would happen if a diversity plan is deficient. “There’s no opportunity of cancelation of the license. The license has been awarded,” said Assistant Attorney General David Stamper.

James Butler, managing director of organizational compliance with the state’s Lottery & Gaming Control Agency, said that agency and the commission will work with an applicant “to take any corrective action plans” to ensure applications meet diversity standards.

Del. Darryl Barnes (D-Prince George’s), who chairs the Legislative Black Caucus of Maryland, who chairs the Legislative Black Caucus of Maryland, said he remains pleased with SWARC’s effort to ensure equity and inclusion are part of the process. Maryland is viewed as a leading state in the nation pushing for minority and women-owned businesses to participate in the sports betting industry.

However, Barnes said the approval process could be improved by considering both the application and diversity plan together.

“It’s something that we can work towards,” he said. “When that application or plan is submitted, it should and must have that equity partner already listed, what the intent is and how [an applicant is] going to move forward and put it together.”

The legislature pushed for equity in the sports betting industry when it approved legislation last year, especially after predominately white-owned businesses received licenses when the medical cannabis industry launched in Maryland almost five years ago.

The law also aims to ensure that entrepreneurs from Maryland have a fair chance to compete against larger betting companies such as FanDuel and Draft Kings.

Meanwhile, the state has published proposed regulations for awarding competitive licenses for additional gaming locations and mobile sports wagering licenses.

A section on economic impact notes the impact would benefit small businesses, especially those that are certified in the state’s minority business enterprise program.

“MBE participation for contractors and vendors that provide support to the sportsbook licensee and operator could also be meaningful,” according to the proposal. “Once these small businesses become either licensed, certified, or registered with the Maryland Lottery and Gaming Control Commission, it provides them with the opportunity to offer their goods and services to other sport wagering facility licensees and operators and mobile sports wagering licensees.”

On Friday, the General Assembly’s Joint Committee on Administrative, Executive & Legislative Review voted to approve the regulations.

“When the MGA passed sports wagering, it did so with the goal of promoting diversity in the industry,” Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County) said in a statement Friday. “The regulations approved, today, by AELR that require sports wagering licensee applicants to seek out minority investors, to use the State’s nationally recognized minority business enterprise program in contracting and submit a substantive diversity plan will help achieve that goal. We are confident that these measures will ensure meaningful minority participation in this new industry.”

The commission will hold a public hearing on the regulations next Friday in Baltimore.

By William Ford