A coalition of Maryland off-track wagering facilities on Wednesday urged lawmakers to permit them to deploy up to 4,000 historical horse racing terminals (HHR) in the state.

With lead sponsor Sen. Paul Corderman (R-Washington and Frederick Counties) calling off-track wagering facilities (OTBs) “a failing industry,” the legislation, SB 982, would permit up to 4,000 terminals to be deployed at a Thoroughbred or standardbred racetrack, or at any OTB, as long as the racetrack or OTB is also a sports wagering licensee.

“We need our OTBs to survive, because if we don’t take advantage of this opportunity for potential increased revenue with HHR machines and OTBs, we’ve got a whole other conversation about losing revenue if the OTBs are not successful in their current business model,” Corderman told the Senate’s Budget and Taxation Committee.

Representatives of several Maryland OTBs spoke in favor of the legislation, while two representatives of the state’s casinos spoke in opposition. The Department of Legislative Services estimates that HHR could produce more than $188 million in revenue annually, which would be taxed at a 15% rate that is much lower than the rate charged on slot machine revenue.

In its current configuration, the legislation could negatively impact the racing industry in other ways, however. Racing receives tens of millions of dollars annually from a carve-out of money generated by slot machines; this bill contains no such carve-out, and were terminals to cannibalize slot machine revenue, it would drive down money the industry depends on for purses, breeder awards, and capital investment.

No one from the Maryland Thoroughbred Horsemen’s Association, Maryland Horse Breeders Association, or Maryland Jockey Club testified.

Any expansion of commercial gaming typically must be approved by a statewide referendum to amend the state Constitution. In 2020, voters approved such a referendum permitting wagering on sporting events.

SB 982 expands the definition of sporting events to include historical horse races. Advocates believe that would enable them to avoid the lengthy and expensive referendum process.

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Though the Maryland Jockey Club has not obtained a sports wagering license, several OTBs have. But that’s not doing much for them, they say.

“Once hopeful that retail sports betting would provide a much-needed sales boost, we’ve instead seen the entirety of sports betting go online,” Alyse Cohen, owner of Long Shot’s in Frederick told the committee. “Retail sports betting for OTBs has been an abject failure.”

The numbers bear that out. In January 2025, more than 97% of the $618 million wagered on sports in Maryland was online.

At the same time, wagering on horse racing also is declining. Wagering at the state’s eight standalone OTBs fell 3% between 2019 and 2023, the last year for which numbers were available, to just shy of $43.5 million.

HHR terminals, which employ parimutuel wagering, use the results of past horse races to generate outcomes. Though that makes them different in operation from regular slot machines, for the player they “mimic the experience” of slots, as the Department of Legislative Services’ fiscal and policy note says.

That is a key factor prompting opposition from the casino industry. There currently are 9,684 slot machines in the state.

“The 4000 machines authorized under the bill represents a 40% increase in the number of slot machines in Maryland, and it more than doubles the number of authorized locations,” said Marta Harding, an attorney representing the MGM National Harbor casino.

Another factor is the tax rate. The tax on slot machine revenue ranges from 42% to 58%. Sports wagering – which is much riskier for the house than casino gaming – is taxed at just 15%. Because this bill locates HHR as a form of sports betting, it would be taxed at the lower rate.

In addition to racing, other recipients of revenue from slots could also be hurt, including local communities that receive impact grants and small businesses benefiting from the Small, Minority, and Women-owned Business Account.

The companion bill in the House of Delegates is HB 1048.