The Maryland Senate heard a hearing on House Bill 1226, the Maryland Illegal Online Gambling Enforcement Act. Six industry executives testified in favor of this bill. A vote will be taken at a later session.
“Essentially what the bill does is says that we have actual regulated gambling in the state of Maryland,” Delegate Sandy Bartlett from District 32 said. “And if it’s not a regulated type of gambling in the state of Maryland, and if you do it and conduct it, and you engage in it and you promote it, then you would be guilty of a misdemeanor and subject to certain fines.”
The Attorney General’s Office and the Consumer Protection Division would handle the prosecution, or it could be a prosecuting attorney, and they would start with a cease-and-desist letter. “We don’t automatically go after folks, but if they don’t adhere to that cease-and-desist letter, then they could be subject to certain fines and they could go into court,” Bartlett said.
Industry and casino operators back the bill to ban sweeps casinos
Mark Stewart with The Cordish Companies and Live Casino, spoke in support of House Bill 1226.
“We all recognize the reality and problems of this illegal activity,” Stewart said. “The question is what to do about it. In August of 2025, Attorney General Brown and all 49 general attorneys wrote the U.S. DOJ, urging the use of website seizures, civil injunctions, asset forfeiture, and the blocking of financial transactions as new tools to disrupt illegal operators’ access to United States consumers’ payment systems and digital infrastructure. House Bill 1226 seizes on those same core strategies and implements them in Maryland’s own enforcement framework.”
“The bill expands the enforcement focus beyond just the illegal operators to the network of third-party service providers that facilitate, support and enable them,” Stewart added. “In short, it disrupts the ecosystem that allows illegal operators to function by using cease-and-desist notices to marketing affiliates and others, taking down websites and blocking financial transactions, all done with appropriate notice, penalties and injunctive relief.”
Maryland Lottery and Gaming Control weighs in
Dr. Jennifer Beskid was there on behalf of the Maryland Lottery and Gaming Control Agency.
“This bill is important as it expands efforts to curtail illegal online gaming activities that proliferate Maryland’s market and siphon funds away from the state,” Beskid said. “The Maryland Lottery and Gaming Control Agency is the entity that operates the lottery and regulates gaming. The state currently prohibits the playing of online lottery slots and table games that require players to pay to play, are based on chance and provide the player the potential to receive cash or a reward that can be converted to cash.”
The agency has sent online gaming operators notices to cease and desist offering their games in the state of Maryland, and they’ve experienced a success rate of approximately 25% of these operators leaving the state. Beyond these letters, the commission is not authorized to take enforcement action against illegal gaming or operators.
“House Bill 1226 would expand enforcement options as it establishes a comprehensive enforcement structure implemented by the Office of the Attorney General,” Beskid said. “Through its consumer protection division, it addresses jurisdictional and evidentiary obstacles. It strengthens enforcement options through collaboration and adds consequences, including fines, imprisonment, or both.”
Research from the American Gaming Association reveals that Americans wage a total of $673.6 billion annually with illegal and unregulated operators, she added.
Taxes and problem gambling at center stage of local support
Brad Rifkin testified on behalf of Caesar’s Horseshoe Baltimore in support of the bill. He focused on page three “dealing with the illegal sweepstakes casinos”.
“Casinos are operating online gaming in this state,” Rifkin said. “As you all know, online gaming’s not legal yet, and they’re doing so without any problem gaming oversight, without any regulatory regime. They’re operating in the face of 75 cease-and-desist letters from Lottery and Gaming. And just yesterday, the city of Baltimore filed an action against several illegal sweepstakes operators to shut them down.”
Caitlin McDonough testified on behalf of Hollywood Casino in Perryville and Cecil County in support of House Bill 1226.
“Hollywood was Maryland’s first casino opening our doors in 2010,” McDonough said. “We employ approximately 350 employees making us one of the largest employers in Cecil County. And since our opening, we pay the highest tax rate in the state on our video lottery revenues to the tune of 58%, making the state a majority partner in our business there. We work very closely with the agency in this highly regulated and highly taxed industry, and we support this legislation to give them every tool they have to shut down this competition online and ensure that all gaming operators that Marylanders are utilizing are regulated and taxed to the same degree.”
Brianne Doura-Schawohl, Director for The Campaign for Fairer Gambling, spoke virtually.
“These operators are not held to any standards, and they do nothing as it relates to problem or responsible gambling, Doura-Schawohl said. “Researchers are clear that these products are ten times more addictive than other forms of gambling, and they are marketed and pedaled completely unchecked. A 2024 report from Yield Sec determined that illegal operators control 74% of the U.S. online gambling market space. That’s nearly ten unregulated sites for every one regulated site each year.”
Doura-Schawohl said the answer is not to create a regulated counterpart and grow the overall market. “The answer is to give your law enforcement the tools necessary to take action and shut down these operations,” she said.
“Ways and Means is considering the policy very carefully,” Delegate Ebersol said. “These bills are not in conflict with each other. House Bill 295 is more about licensing and preventing licensing going forward, whereas this bill has to do with the punitive nature of what happens when you violate these rules.”
“We’ve already all determined that these are highly predatory models,” Delegate Hornberger said. “In many cases they’re victimizing the users of the service, and now you have someone who is a victim and also an offender that’s using the product. In the regulated market, we have things like disclaimers and hotlines, and we have ways for those people if they self-identify to get the help that they need.”
“Could this be a vehicle to be able to get those resources in front of the people who are the victim and the offender so that they can get help?” Hornberger asked. “Because that’s where the folks that have the worst of the worst problems are gravitating to. They’re moving towards this illegal market because it is so predatory and we don’t have the ability to reach them.”
Maryland Bankers Association supports bill with amendments
Evan Richards, head of Government Community Relations for the Maryland Bankers Association (MBA), also testified favorably with amendments on House Bill 1226.
“It’s already illegal for banks to do business with illegal companies — that’s in the Bank Secrecy Act,” Richards said. “And at the same time, banks also must comply with the Unlawful Internet Gambling Enforcement Act, which mandates the implementation of risk-based policies and procedures reasonably designed to identify and block unlawful Internet gambling transactions.”
There are already some federal rules and regulations in place around this issue. Looking at the bill itself, Richards said there were several provisions that their members raised concerns about — the first being that a financial transaction provider shall be deemed to have constructive knowledge. If the AG lists the Internet website URL on his website, Richards believes that it is burdensome for their financial institutions to comply with.
Richards said more problematic was the enforcement provision on page 12 for financial institutions. He said the provision under Section D doesn’t include the word ‘knowingly’ where knowingly is involved in other provisions related to financial transaction providers.
“Our concern is what this may lead to is that you have a financial institution that’s received a cease-and-desist order,” Richards said. “You then have the no gambling operator who has since used another way to try to filter these transactions through our financial institution. And for whatever reason, the bank is unable to detect it and may be in violation of this cease and deist order.”
The MBA believes that ‘knowingly’ is needed. They have some concerns about the financial penalty as well.
