When the state’s registered voters approved Maryland sports betting last year, they set the stage for what could be a diverse field of Maryland sportsbook operators. Based on the attendees to a Maryland “Sports Betting 101” educational summit last week, a diverse array of businesses appear to at least be kicking the tires on getting into gambling that way.
Among the attendees were some of the usual suspects: casinos, racetracks, and operators of sportsbooks in other jurisdictions. However, owners of businesses not traditionally associated with gaming were also there to gather more information.
Maryland Sports Betting 101 event draws a crowd
According to Bruce DePuyt of Maryland Matters, the event at Live! Casino in Hanover drew over 200 attendees. The casino and its owner, the Cordish Companies, were among the event’s sponsors. Joining them were the National Council of Legislators from Gaming States and Spectrum Gaming Group.
Among the discussions were barriers to entry and marketplace volatility. The presentations also heavily featured including ethnic minority- and women-owned businesses. Representatives for some of those very enterprises showed up for the meeting.
One such enterprise is Delmock Entertainment. That company handles information technology for its clients and is a minority-owned business. Its interest in this segment comes from its partnership with the Riverboat on the Potomac. That gambling company also recently partnered with PointsBet Sportsbook.
Another different type of small business at the event was a combination off-track betting site/sports bar in Frederick, Long Shot’s. Alyse Cohen, the business’ owner, explained her rationale for seeking a sports betting license.
“We were losing a lot of revenue on big game days to West Virginia and Pennsylvania and even DC,” Cohen stated. “So this gives people in our local community an opportunity to keep state dollars in-state.”
It seemed that owners of small- to medium-sized businesses in the commonwealth aren’t deluded about their chances of reaping huge profits off sports betting, however. In fact, that was one of the areas of emphasis for the seminar.
Getting into sports betting a gamble in and of itself
Another event attendee representing an investment firm with multiple offices in the northeast part of the United States succinctly laid out concerns.
“It is very difficult. It is very expensive,” said Chad Beynon, Macquarie Securities’ Senior Gaming and Lodging Analyst. “People are losing a lot of money operating this on the future. They’re betting on what’s going to happen down the line, and I think the market will dictate that.”
For a business like Cohen’s, it’s easy to understand the predicament. On one hand, not offering sports wagering at her location puts her business at a competitive disadvantage. Like wifi, it’s something that her customers will come to expect as an available amenity.
However, as Beynon explained, the costs of offering that aren’t insignificant. Beyond the cost of acquiring a license and complying with all the regulatory protocols, there are costs for either contracting with a services provider or building its own platform. Then, of course, there’s the cost of paying out winning wagers.
Also, take into account that the most robust sports betting operations only average a hold of about 7%-9%, depending on market conditions. Suffice to say, owners of businesses like Cohen aren’t selling their beverages and food for a price that might give them a return of 9% if they’re lucky.
This event was evidence that MD businesses are cognizant of the opportunities and risks associated with sports betting. The coming months will tell how many of them decide they are more “danged if they don’t” than “danged if they do.”