Published: March 26, 2024

Maryland Online Casino Market Could Be Worth $1 Billion By 2029

As the Maryland legislature deliberates on a potential voter referendum regarding whether to legalize MD online casinos, a big part of that conversation is the money involved. A fiscal note attached to the potential referendum bill denotes some figures.

That note estimates the revenue expanded gambling in the state could bring in. That estimate could be a little conservative. The market for real-money online casino play might expand more rapidly than the note hypothesizes.

Maryland online casino legislation faces uncertain future

The Maryland House of Representatives has approved legislation that would put the issue of whether to legalize online casino play for real money before voters in November 2024. The proposal also contains a framework for that gaming should voters approve.

However, the fate of the package is uncertain in the Maryland Senate. Debate will begin in the Senate Budget and Taxation Committee, with a hearing set for March 26. The Maryland legislative session ends on April 8.

Maryland Sen. Ron Watson is proposing simplifying the process for this year, focusing only on authorizing the referendum on the issue. If voters approve, the legislature could return in 2025 and work out enabling legislation.

At the same time, even that measure faces significant resistance. The fiscal note attached to HB 1319 shows a part of that resistance. The note points to limited loss of revenue at physical casinos in the state, which Watson and other data refute.

Regardless of the progress of HB 1319 in 2024 and whether that cannibalization is legitimate, the note also projects revenue figures for online casino play in Maryland annually beginning with the 2024-25 fiscal year. Those numbers are:

  • FY2024-25: $6 million
  • FY2025-26: $539.4 million
  • FY2026-27 $670.7 million
  • FY2027-28 $809.6 million
  • FY2028-29 $904.9 million

Those numbers might be smaller than the state’s value in this regard.

Maryland online casino valuation might be conservative

Unfortunately, the fiscal note does not disclose its methodology. Thus, it’s difficult to scrutinize the logic behind how the people who prepared this note arrived at their conclusions. However, their dollar estimates could be reserved.

PlayUSA used US Census Bureau data from 2020 to compare the total populations of Maryland with four states with legal real-money online casino play in action. Those states are:

  • Connecticut
  • Michigan
  • New Jersey
  • Pennsylvania

From those comparisons, simple ratios were created. We then refined those ratios using 2020 US Census Bureau population demographic data, specifically:

  • age representation
  • income demographics
  • rural vs urban percentage

From there, we created one set of estimates using historical online casino revenue from the aforementioned states and those ratios.

Meanwhile, ratios were also created based on a breakdown of historical online casino vs online sports betting revenue in those four comparison states. Using those ratios, another set of projections for online casino revenue in Maryland using the state’s recent sports betting activity was figured.

The two sets of projections were then reconciled to each other. At that point, the numbers looked like this:

  • FY2024-25: $270 million
  • FY2025-26: $800 million
  • FY2026-27: $950 million
  • FY2028-29: $1 billion

While the value of the market at maturity is just about 10% higher in this estimate, that 10% equates to a $100 million in difference. The bigger difference is in how quickly the market could grow to that threshold.

Maryland’s online casino market could be ready to take off

Looking at historical online casino revenue data in the markets above, data suggest that growth could be more vigorous than the fiscal note hypothesizes. For example, New Jersey online casino revenue has averaged 27.2% growth in each of the past three fiscal years. There are other considerations unique to Maryland.

The relative lack of other states launching an online casino industry at the same time might work heavily in Maryland’s favor. Licensees could focus a greater amount of their resources on promoting their apps in Maryland.

Additionally, it’s worth considering that Maryland has an established online sports betting framework. Marylanders will already be familiar with the format of online gambling and the brands that are likely to participate in online casino play.

With all of that taken into account, there are reasons to expect more rapid and robust market growth than the fiscal note predicts. At the same time, there are assumptions in these estimates to discuss.

What these numbers assume and what could go wrong

The most obvious assumptions here are that Marylanders will vote to approve online casino gaming, the legislature will quickly enact necessary statutes, and that operators will ramp up quickly in 2025. Any of those things could go awry. The problematic rollout of PA online casino apps is a historical example.

Beyond that, the next most significant assumption is that enabling legislation does not include any provisions that would significantly hinder the growth or potential of the market. Based on the existing bill the Maryland House approved that seems unlikely, but at this point, that’s just an assumption.

Another assumption is the behavior of online gambling companies. These numbers assume operators would be interested in Maryland and apt to spend on marketing there as in other markets.

Finally, these estimates assume that gamblers in Maryland will behave similarly to their counterparts in other states. If everything goes according to plan, though, Maryland’s online casino market could be worth $1 billion a year.

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