Lawmakers in Maryland have taken significant steps to prohibit sweepstakes casinos by passing a new bill, while another enforcement measure races against a crucial deadline.
The Maryland House has approved House Bill 295, which specifically targets sweepstakes casinos, and has forwarded it to the Senate for consideration. Concurrently, a different measure, House Bill 1226, has progressed to its third reading but is under time pressure.
House Bill 295 introduces a criminal ban on what it defines as “interactive games.” These are categorized as any online or mobile games that:
- “utilize multiple currency systems of payment allowing the player to exchange the currency for any prize, award, cash, or cash equivalents”
- “simulate casino-style gaming, lottery games, or sports wagering.”
Importantly, this bill excludes games that offer non-cash prizes.
The legislation targets anyone involved in the operation, promotion, or conduct of these online “interactive games.” Those found in violation could face criminal charges, with fines ranging from $10,000 to $100,000 and potential imprisonment of up to three years.
After a month-long hiatus, the Ways and Means Committee held its first hearing on the bill on February 5, where it received support from the Maryland Lottery and Gaming Control Agency. Representatives from the agency expressed concerns that these platforms are engaging in illegal gambling, complicating their ability to regulate effectively.
In contrast, industry representatives claimed compliance with existing laws and advocated for regulation rather than a ban.
On March 18, the Ways and Means Committee finally moved HB 295 forward, incorporating amendments to its enforcement provisions before sending it to the House floor.
During the second reading on March 19, a brief discussion took place where Del. Jefferson Ghrist raised concerns about whether players participating in free-to-play games or those receiving prizes would be affected. In response, Del. Jheanelle K. Wilkins, Chair of the committee, clarified that the measure excludes free games but focuses on “interactive games” that provide rewards, labeling sweepstakes casinos as unlicensed online establishments.
On March 20, the House passed HB 295 with a vote of 105-24, without further discussion.
Meanwhile, HB 1226, which also aims at sweepstakes casinos, has advanced from its second reading and is now awaiting its third reading. This enforcement bill seeks to curb illegal online gambling by prohibiting operators, promoters, and service providers from facilitating such activities. It grants regulatory authorities the power to issue cease-and-desist orders, block payments, and pursue both criminal and civil penalties against offenders.
However, HB 1226 is facing a pressing deadline, as Maryland’s crossover deadline is set for March 23, meaning it must pass today to move forward to the Senate.
If HB 295 is approved by the Senate, and if HB 1226 makes it through before the deadline, Maryland would have two separate bills to consider. The Senate has already heard testimonies regarding two bills, including SB 112, which is related to HB 295, but no further action has been taken since its initial hearing on January 28. Lawmakers have previously debated whether a ban or regulation is the better approach.
It is worth noting that the Senate passed a ban bill last year, but it did not progress in the House. Should the Senate approve either HB 295 or HB 1226, Maryland would join Indiana, which enacted a similar law earlier this month, as well as six other states that have introduced ban legislation in the past year.