By DYLAN WAUGH
ANNAPOLIS (March 21, 2009) - As distracted office workers and college basketball fans gamble millions on the opening weekend of March Madness, two of Maryland's neighboring states are looking to legalize sports betting as a way to raise revenue.
Delaware Gov. Jack Markell views sports betting as a partial solution to his state's $750 million budget shortfall. And New Jersey State Sen. Raymond Lesniak next week intends to challenge a federal ban on sports gambling.
The moves come as Maryland struggles to implement its slots plan, which was intended to raise money for education and save the state's horse racing industry.
But even though Delaware might have sports betting in place in time for this fall's football season, experts don't see the move cutting into the slots revenue projected to start flowing into Maryland in a few years.
"I don't think there is really much risk of Delaware stealing customers from Maryland," said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.
Eadington described sharp differences between the types of gamblers, calling slots fans "pure chance players," and sports bettors "much more cerebral."
"There's not a lot of spillover," Eadington said, referencing Nevada gambling data. "That's pretty clear from a lot of evidence."
Bethesda-based gambling analyst Jeffrey Hooke agreed, noting distinctions between slots gamblers and sports bettors as well as the distance Maryland residents would have to travel in order to bet on sports in Delaware.
"I don't think it's going to have any effect," Hooke said."Maryland slots is basically catering to the convenience bettor."
Beyond catering to different types of gamblers, Eadington doesn't think sports betting in Delaware would create a big enough market to infringe on Maryland's slots without including provisions for online gambling or out-of-state wagering.
Senate President Thomas V. Mike Miller Jr., D-Calvert, said he is "not at all" worried by the prospect of legalized sports betting just east of Maryland, citing the "two totally different crowds" attracted by slots and sports gambling.
Other Maryland lawmakers were hesitant to predict how nearby sports betting could affect the state's projected slots revenue, instead taking the opportunity to criticize the state slots law and the slots implementation process.
"It's too hard to tell right now," said Senate Minority Leader Allan Kittleman, R-Carroll. "I don't know how it will affect the slots in the sense that I don't know slots is going to be successful anyway."
House Minority Whip Christopher Shank, R-Washington, said he didn't see a connection between sports betting and Maryland's slots. He, too, criticized the slots process in his response.
"The entire process has been rife (with) political errors and omissions and it doesn't surprise me now that you'll see this interstate political tit-for-tat," Shank said.
Maryland voters approved slots in a referendum last year but the state received only four qualified bids for a total of fewer than half of the 15,000 terminals allowed. The tepid response means the state will likely struggle to deliver the $660 million for public schools it hoped slots would generate by the 2013 fiscal year, regardless of possible sports betting in Delaware.
Sports betting in Delaware might be limited to parlay bets, which are combinations of at least two individual outcomes—for example betting on a basketball team winning and a certain player scoring more than 15 points. Sports betting is prohibited by federal law but Delaware is one of four states exempt from the restriction, having been grandfathered in for experimenting with a sports lottery before the 1992 federal ban.
Legislation could be introduced in Delaware as soon as next week.
A 1999 National Gambling Impact Study Commission report estimated $80 billion-$380 billion is illegally wagered on sports each year nationally. In 2008, more than $2.5 billion was legally wagered on sports in Nevada, according to The American Gaming Association.
College basketball's annual March Madness tournament and the Super Bowl are widely considered among the most popular gambling events. Gamblers place $80-$90 million in legal bets in Nevada on the NCAA tournament each year, according to American Gaming Association statistics.
But with approximately half of the country participating in some sort of bracket pool, the amount of money wagered on the tournament illegally is likely much higher. Eadington estimated $600 million was lost in illegal basketball gambling last March based on projections from legal Nevada betting data, but cautioned the figure includes wagers on NBA games as well.
The NCAA and professional sports leagues have widely opposed sports gambling. Delaware does not have a major league baseball, basketball, football or hockey team.
Although Maryland is currently forbidden from entertaining sports betting legislation, the state may not be immune from the sports gambling movement forever.
New Jersey State Sen. Raymond Lesniak, D-Union, said he plans Monday to file a legal challenge to the 1992 federal law banning sports betting, potentially legalizing sports gambling nationwide.
Lesniak argued that New Jersey residents already "profusely" gamble on sports and legalizing the activity would allow the state to generate revenue currently captured by offshore gambling entities and organized crime.
He estimated New Jersey could bring in $100 million annually from a probable 8 percent tax on sports gambling. New Jersey sports betting would likely occur in Atlantic City's casinos, racetracks and on the Internet, he said.
But Lesniak said New Jersey wouldn't be the only state to benefit if he is successful.
"Other states would be able to raise billions of dollars," Lesniak said.
Hooke said many other states would likely take advantage of legalized sports betting, but "it's hard to say" whether Maryland would do so, noting the strong presence of anti-gambling interests in the state.
"I could see Maryland taking a look at the thing eventually," Hooke said.
State leaders said it's too early to determine Maryland's possible interest in pursuing sports gambling.
A spokesman for Gov. Martin O'Malley said he is more focused on the state's current fiscal woes than addressing the possibility of sports betting in Maryland. O'Malley and lawmakers are expected to make more than $500 million in cuts to next year's budget.
Alexandra Hughes, a spokeswoman for House Speaker Michael Busch, D-Anne Arundel, also said the issue is not a high priority right now.
"At this point, the state is pretty universally focused on implementing ... a slots program," Hughes said. "We'll wait and see."
Capital News Service Staff Writer Michael Frost contributed to this report.