Sports Wagering License Application Window
The Sports Wagering Application Review Commission (SWARC) accepted applications and non-refundable application fees for Class B facility licenses and mobile licenses from Tuesday, Sept. 6, 2022 through Friday, Oct. 21, 2022. The application window is now closed.
SWARC will review eligible applicants and award licenses to qualified applicants on a rolling basis. License awards will be voted on during public meetings that will be live-streamed. Watch the Meeting Records page for announcements.
Clarification on Application Deadline
At this time, no other application windows are planned. Under the sports wagering law, SWARC is authorized to award up to 60 mobile licenses and up to 30 Class B facility licenses. If SWARC does not award the maximum numbers of licenses, SWARC may (but is not required to) create additional application windows for any portion of the remaining mobile licenses or Class B facility licenses. The establishment of any additional application windows is at SWARC’s discretion and would require approval of a majority of SWARC members.
SWARC and MLGCC Parallel Tracks
Applying for a Class B facility or mobile sports wagering license requires submitting information and fees to both SWARC and the Maryland Lottery and Gaming Control Commission (MLGCC):
- SWARC evaluates applicants’ suitability for a license in a competitive process and requires payment of a non-refundable application fee.
- MLGCC investigates applicants to determine if they demonstrate the integrity and financial stability to be qualified for a license, and applicants must pay investigative costs (see COMAR 36.10.02 and COMAR 36.10.06).
SWARC’s evaluation of applicants and MLGCC’s investigation of applicants’ qualifications may occur simultaneously on parallel tracks. Click here to view a flow chart illustrating the SWARC and MLGCC parallel processes.
Below is a description of the steps in the process. Click each heading below to view the details.
1. SUBMISSION OF APPLICATIONS AND FEES TO SWARC AND MLGCC
SWARC application and NON-REFUNDABLE SWARC application fee
SWARC has established a 45-day window from Sept. 6, 2022 through 5 p.m. on Oct. 21, 2022 for applicants to submit their applications and fees.
All application materials AND the SWARC application fee MUST be received by 5 p.m. on Oct. 21, 2022. It is the applicant’s responsibility to ensure that all application materials and the application fee have been submitted and received by SWARC.
Applications will be rejected if all application materials and the application fee are not RECEIVED by the deadline.
SWARC application fees are as follows. THE SWARC APPLICATION FEE IS NOT REFUNDABLE:
- Class B-1 Facility: $250,000
- Class B-2 Facility: $50,000
- Mobile: $500,000
MLGCC background investigation materials and investigative costs
Applicants must contact MLGCC’s Licensing Division at 410-230-2699 or [email protected] to request access to the eLicensing online portal. All information and documents required for MLGCC’s background investigations MUST be submitted into eLicensing AND investigative costs MUST be paid before an investigation can begin.
All MLGCC background investigation applications and investigative costs must be received by MLGCC no later than 14 days after the applicant submits its SWARC application and application fee to SWARC.
Investigative costs will vary widely, depending on the complexity of the applicant’s personal and business finances. Generally, these costs are as follows:
- $2,000 deposit for each facility or mobile applicant
- $5,287.25 for each principal employee
- $437.25 for each non-principal sports wagering employee
- $3,550 to $6,000 for each contractor
- $100 to $1,000 for each vendor
2. EVALUATION BY SWARC / INVESTIGATION BY MLGCC
SWARC Competitive Process
SWARC will review any applications that have been submitted, along with the application fee, by the deadline. Page 14 of the SWARC mobile application and Page 17 of the SWARC Class B facility application provide the evaluation criteria that SWARC will follow.
SWARC will inform MLGCC of all applicants that are eligible for consideration. The primary reasons an applicant may not be eligible are if a proposed sports wagering facility location is within an exclusion zone identified in the sports wagering law, or if an applicant has provided an incomplete SWARC application or is late in submitting its SWARC application and paying the SWARC application fee.
SWARC will conduct a competitive process to select those eligible applicants to whom it intends to award licenses. SWARC is prohibited from awarding a license to an applicant that has not been found qualified by MLGCC. Thus, SWARC cannot award a license to an applicant until it has been informed by MLGCC that the applicant is qualified.
While SWARC’s competitive review of eligible applicants is ongoing, MLGCC will be conducting background investigations of eligible applicants.
Applicants or prospective applicants MUST submit all required background investigation materials and investigative fees before an investigation can begin. In any event, the applicable MLGCC background applications and investigative fees must be submitted no later than 14 days after the applicant submits to SWARC its SWARC application and application fee.
MLGCC’s Licensing staff will provide specific guidance to each applicant regarding background investigation materials and fees that are due.
MLGCC’s investigations determine whether an applicant has demonstrated, by clear and convincing evidence, that it has the honesty, integrity, good character and financial stability to be “qualified” for a sports wagering license. MLGCC’s Licensing staff will be in frequent contact with applicants during their background investigations to guide them through the process.
3. FINDING OF QUALIFICATION BY MLGCC / LICENSE AWARD BY SWARC
MLGCC Qualification Hearing
After an investigation is complete, the Licensing staff will present their findings to the MLGCC during a public hearing. These hearings are often conducted during the MLGCC’s monthly public meetings, but the MLGCC may also call special public meetings for the purpose of holding sports wagering licensing qualification hearings. Applicants are provided with the opportunity to address the MLGCC during the hearings. The MLGCC then notifies SWARC of applicants that it has found “qualified.”
SWARC License Award
After receiving notification from MLGCC, SWARC determines which “qualified” applicants will be “awarded” licenses. SWARC then informs MLGCC of the “awardees.”
4. ISSUANCE OF LICENSE BY MLGCC
MLGCC Operational Requirements
After an applicant has been “awarded” a license by SWARC, staff from Maryland Lottery and Gaming will guide the awardee through numerous operational requirements that all awardees must meet before they are “issued” a license and can launch sports wagering operations.
All sports wagering facility and mobile licensees are required to complete the following steps:
- MLGCC must find each licensee’s contractors (including, if applicable, a licensee’s sports wagering facility operator or mobile operator) and staff qualified for licenses. SWARC’s approval of these licenses is not required.
- Each licensee must submit documentation and receive MLGCC approval of its internal control procedures; security and surveillance systems and procedures; technology and back-office systems; and responsible gaming plan.
- Each licensee must verify that it has trained its staff to conduct sports wagering operations.
- Each licensee must successfully complete a controlled demonstration of its sports wagering operations, which involves scheduling at least two dates to conduct live wagering under the observation of Maryland Lottery and Gaming staff.
MLGCC staff will guide awardees through each of these steps beginning as soon as their sports wagering operator, if any, has been identified. The controlled demonstration of sports wagering operations is the final step in the process. After completion of a successful controlled demonstration, MLGCC may “issue” a license allowing the licensee to commence sports wagering operations.
Frequently Asked Questions: Ownership Criteria Provision
In order to clarify the interpretation of the ownership criteria provision that each applicant must satisfy (COMAR 36.11.02.19), SWARC offers the following questions and answers. Click each heading to view the text.
Text of COMAR 36.11.02.19
.19 Ownership Criteria
A. SWARC may not award a license to an Applicant that has not demonstrated direct or indirect ownership of not less than 5% by individuals with Personal Net Worth of less than $1,847,000 each.
B. Owners of the Applicant intended to satisfy this ownership criteria shall provide to the Applicant a signed, notarized certification stating that the individual’s Personal Net Worth is less than $1,847,000 and such certifications must be submitted with the Applicant’s SWARC application.
“Personal Net Worth” is defined in COMAR 36.11.01.02C(10) as the net value of the assets held by an individual, including the individual’s share of assets held jointly or as community property with the individual’s spouse, after total liabilities are deducted. Personal Net Worth does not include:
(1) the individual’s ownership interest in the Applicant;
(2) the individual’s equity in his or her primary place of residence;
(3) any mortgage or loan secured by his or her primary place of residence as a liability; or
(4) the cash value of any qualified retirement savings plans or individual retirement accounts.
Who must satisfy the ownership criteria set forth in Regulation .19?
The ownership criteria applies to every entity that submits an application for a competitive sports wagering license.
Therefore, every applicant for a competitive sports wagering license must include one or more individuals (each having a personal net worth of less than $1,847,000), who together own at least 5% of the applicant. This ownership may be direct or indirect as described below. Therefore, applicants that are sole proprietors, corporations, partnerships, limited liability companies, or other entities, where all of the owners have net worth of more than $1,847,000, must recruit additional investors to satisfy the ownership criteria.
When must the ownership criteria be satisfied?
The ownership must be effective as of the date an application is submitted to SWARC, but agreements may be contingent upon being awarded a license by SWARC.
If an applicant is a publicly held company, must it satisfy the ownership criteria set forth in Regulation .19?
Yes. All applicants for a competitive sports wagering license must satisfy the ownership criteria. If the publicly held company cannot demonstrate that its public stockholders satisfy the ownership criteria, then the publicly held company must consider other alternatives to satisfy the criteria. Options may include forming a subsidiary, joint venture or other arrangement with individuals that satisfy the personal net worth criteria.
What is meant by 'direct or indirect' ownership?
A direct owner of an applicant is an individual who owns shares (or other equity interests) directly in the applicant. For example, if an individual owns 5% of the shares (or other equity interests) in an applicant, then the individual is a direct owner of the Applicant.
An indirect owner of an applicant is an individual who owns shares (or other equity interests) in another entity which, in turn, owns shares (or other equity interests) in the applicant. For example, if Person A holds a 25% share of Company X and Company X holds a 20% share of the applicant, then Person A is an indirect owner of a 5% share of the applicant (25% of the 20% share).
How must ownership in the applicant held by persons satisfying the personal net worth limitation be evidenced?
To qualify as an owner of the applicant, a person must hold an interest in an applicant that is evidenced by: (a) record ownership; (b) stock or other ownership in which the holder thereof participates in the capital or profits of the applicant; or (c) an interest that entitles the person to benefit substantially and is equivalent to ownership by an agreement, relationship, or other arrangement.
How does an applicant know the personal net worth of its owners?
As noted in the regulation, an applicant may rely upon a notarized certification of an owner attesting to the owner’s personal net worth (calculated as provided in the regulation).
Can applicants satisfy the ownership requirements in COMAR 36.11.02.19 by creating revenue- or profit-sharing arrangements with persons satisfying the net worth limitation?
Yes. A revenue- or profit-sharing arrangement between an applicant and persons satisfying the net worth limitation provided in COMAR 36.11.02.19 would satisfy the ownership criteria provision as long as the persons who satisfy the net worth limitation, in the aggregate, have rights to participate in at least 5% of the applicant’s revenues or profits. Any single person or entity receiving a participation percentage of 5% or more will be considered an “owner” under MLGCC’s regulations, and any such person or entity will be subject to a full background investigation by MLGCC.