New Version Of Maryland HHR Proposal Would Send Decision To Voters

Maryland state Sens. Paul Corderman and Karen Lewis Young renewed their efforts to bring historical horse racing (HHR) to the Old Line State Wednesday as Corderman introduced their legislation to the Budget and Taxation Committee.

Framing SB 639 as a way to generate new tax revenue, help off-track betting locations, and prevent potential tax revenue from going over state lines, Corderman and Lewis reworked portions of their bill from last year, when it failed to advance out of this committee.

Multiple OTB owners and a representative from Riverboat on the Potomac testified in favor of the bill while representatives from MGM National Harbor and Caesars-owned Horseshoe Casino spoke in opposition.

There was no vote on the bill Wednesday.

Corderman outlines key changes from 2025

In his remarks to the Budget and Taxation Committee, Corderman touched on the distinctions in this year’s bill compared to 2025. The biggest difference is that passage of SB 639 and its House companion HB 1240 would result in HHR being put to the voters for a referendum in November since it qualifies as an expansion of gaming.

The state senator followed with a two-pronged approach in detailing what the estimated new revenue stream would mean for off-track betting operators while helping lessen an estimated flight of $40 million in gaming tax revenue from leaving Maryland. Virginia’s burgeoning HHR marketplace was referenced repeatedly during Wednesday’s hearing, with both proponents and opponents noting its impact.

“We have an obligation to provide them [OTBs] the opportunity to help themselves and at the same time, help our state,” Corderman said. “Because if we don’t, this won’t only be a lost opportunity to increase revenue, we’re going to be on the other side of it. We’re going to be making up for lost revenue.

“And (when) that happens, not only do they, their employees in our community suffer, Maryland will suffer, and more specifically the Maryland horse racing industry will suffer.”

Cohen returns to the front line

Alyse Cohen, who owns Long Shot’s OTB and Sportsbook in Frederick County, testifed in support of HHR for the second consecutive session. She called it “the best proven solution to preserving not only the OTB framework, but also Maryland’s horse racing industry, just as it has done in eight other states.

“The adoption of HHR would help address shortfalls in horse racing purses, the Blueprint Fund, declining lottery revenues, and other critical initiatives without raising taxes and without asking the state for one additional dollar,” she added, noting revenue at OTBs statewide has declined by 40% in recent years. “We want to save our businesses and contribute to this great state at the same time.”

Corderman’s and Cohen’s arguments were buttressed by a fiscal policy note from the Department of Legislative Services released Tuesday that estimated HHR could generate $56.5 million in revenue in its first year of operation based on 2,400 terminals being active in Fiscal Year 2028, and increasing to $188.3 million at full maturity in FY 2031.

Casinos counter: HHRs would cannibalize revenue

The proposed tax rate in SB 639 and cannibalization concerns emerged as points of contention for the Maryland-based casino operators testifying in opposition. For the horse racing industry, Corderman and Lewis Young mirrored the VLT distribution that dedicates 6% of tax receipts to horse racing purses and 1% to track facility renewal.

OTBs would be taxed at 40% while the state’s six casinos, should they want to offer HHR, would see those positions taxed at the same rates as their video lottery terminals (VLTs). Those rates range from 61% for Hollywood Casino in Perryville to 40% for the smaller Rocky Gap Casino. Each venue negotiated its own tax rate at the time of establishment, with MGM National Harbor and Horseshoe Casino paying 56% and 54%, respectively.

Marta Harding, speaking on behalf of MGM National Harbor, pointed out the average VLT tax rate for the six casinos is 55%, “which means every dollar that leaves a Maryland casino to go to an HHR facility, the state is going to lose 15 cents on average.”

Harding added the Virginia-based HHRs are also impacting MGM’s bottom line, and the answer is not to flood the market with more HHRs in Maryland. She pointed out Rose Resort in Dumfries, Virginia, which is 30 miles from MGM National Harbor, has contributed to a “14 percent impact in that area to our rated play” and added slot revenue at MGM National Harbor was down $10 million in the first year Rose Resort opened.

“You don’t have to tell MGM about Virginia,” Harding said bluntly. “We are on the front lines of that fight and we are fighting it every day. They are the fastest growing commercial gaming market in the country and they’re not stopping. We just don’t think the solution to that problem is to flood Maryland’s market with an additional 4,000 VLT-like machines.”