Maryland SWARC Unclear on “Ownership Requirement” in Sports Wagering Rules
From John Pappas – As shared in last week’s update, it seems the Maryland SWARC may finalize their current draft licensing rules without including any direct ownership requirements for woman-/minority-owned businesses. This is a departure from the SWARC’s stated intent over the past year, and calls into question the need for the “disparity study” and the delay in launching mobile sports wagering.
Nevertheless, I am told that unless something “dramatic” happens between now and the next two weeks, the rule will remain unchanged. The rule could be added to the state register, and open for formal comments by end of August.
As you may know, the current rule does include an ownership requirement tied to net worth, which requires an applicant to have a 5% owner with a net worth under $1.84M. See more in Section “.19 Ownership Criteria” of the attached document. As a point of clarity, the requirement is that any number of individuals can make up that 5% ownership. Further, each of those individuals with an ownership stake, can have a net worth under $1.84M and it doesn’t matter if collectively their net worth exceeds that threshold. Also, if a single individual owns 5%, they would be considered a “beneficial owner” and a “principal” under the MD Lottery regulations and therefore subject to suitability investigation and licensing.
iDEA is considering whether or not to weigh in on the current rule since it could raise concerns/questions about the “Ownership Criteria” requirement. I’m told we can provide informal comments ahead of the rule being published.
We welcome our members’ timely feedback on what, if any, action we should take on this. Please feel free to email me directly at jpappas@ideagrowth.org, or call me to discuss (1-202.870.7777).