A report from the Sage Policy Group, commissioned by the Anne Arundel County Chamber of Commerce, show legalization of iGaming in Maryland could result in a statewide personal income decline of $65M, a reduction of $1.9M in state income tax and $1.2M in local income tax annually.
ANNAPOLIS, MD – The Sage Policy Group in partnership with Anne Arundel County Chamber of Commerce today released a report outlining the potential impacts if iGaming is legalized in the state of Maryland. The study examines several key indicators, both those mentioned in The Innovation Group’s (IG) recent “iGaming in Maryland” report as well as others that were not included, showcasing the potential and proven risks to the state’s economy if iGaming is legalized in the upcoming legislative session.
The Anne Arundel County Chamber of Commerce commissioned the report as part of its Legislative Watch Program, which allows them to identify legislation which may harm existing businesses in Maryland and potentially create a reduction of jobs.
The report addresses five primary categories of risk including economic leakage, job destruction, negative employment impacts beyond the gaming industry, reduced capital investment, and business decline among entertainment destination clusters. Key outcomes include:
- In total there are six brick and mortar (B&M) casinos in the state that risk loss of revenue which flows instead to out-of-state firms operating iGaming platforms. While B&M casinos support local jobs, iGaming jobs are often held in other states. Many of these locally held jobs will disappear, taking away wages and benefits currently available to Marylanders.
- In addition to an immediate reduction in revenues, the potential for B&M casino expansion would also be diminished. iGaming will limit further capital investments by B&M casinos in the state including synergistic hotels, outdoor patios, restaurants and more.
- Casinos in Maryland currently support 27,000 jobs, directly or indirectly as of 2023, according to the American Gaming Association, with more than 4,000 in Anne Arundel County. The legalization of iGaming could result in the loss of 2,700 jobs. The reduction may be greater when the money spent by out of state travelers visiting casinos is considered.
- The leisure and hospitality industries are experiencing one of the slowest recoveries following the pandemic, with 26,000 fewer jobs in October 2023 compared with February 2020, marking a 9% decline. These venues employ residents and purchase local supplies, both of which could decline significantly if iGaming is approved.
- iGaming could diminish employment opportunities for Marylanders without college degrees. Currently, 20% of the state’s workforce did not graduate high school. Those workers could lose access to living wages which they are able to make in positions such as table games dealer.
- Many of Maryland’s B&M casinos have driven new tourism destinations to open nearby, creating entertainment and shopping clusters, such as the Warner Street Entertainment District in Downtown Baltimore and Arundel Mills in Hanover. As fewer guests travel to visit casinos for in-person gaming, surrounding venues will also suffer from a loss of visitors. The result is a loss of jobs that extends beyond the casinos.
- Evidence suggests problem gambling increases in states where iGaming is legal, putting Marylanders at risk for addiction problems which can be challenging to address from behind a screen.
The iGaming report was conducted by Sage Policy Group and managed by Anirban Basu, Chairman and CEO of Sage Policy Group, Inc. and former chair of the Maryland Economic Development Commission from 2014-2021. Basu is a practicing economist with four graduate degrees including a JD and PhD.
“Several years ago, policymakers in Annapolis determined that economic and financial life in Maryland would be improved by allowing the development and operations of six casinos,” said Anirban Basu. “Today, those casinos are fully operational, supporting local employment, and giving back to communities, generating tens of millions of dollars to support public education and other State priorities each month. iGaming jeopardizes these dynamics when the State can least afford to absorb additional risk.”
As many of these risks have already proven true following the implementation of legal online sports betting, it is irresponsible to overlook these risks for the sake of potential direct gaming taxes which may be offset by the multi-layered reductions. According to the report, the risks associated with iGaming far outweigh the potential tax revenue and must be considered holistically to accurately gather a forecast of its potential impact.
“We have worked with Sage Policy Group in the past and they have a superlative reputation for researching economic matters that have great potential impact on the state,” added Mark Kleinschmidt, CEO of the Anne Arundel County Chamber of Commerce. “Their collaboration on researching this pressing matter brings much needed insight into the potential impacts of iGaming in Anne Arundel County and throughout the State of Maryland.”
To learn more about the findings of the report and additional potential impacts, Click igamingreport
