How to Get a Maryland Sports Betting License: Small-Venue Class B Licenses

Maryland's sports wagering framework offers a path for small businesses to operate retail sports betting venues through Class B facility licenses. These licenses are designed for operators with limited scale, and they differ significantly from Class A (established casinos) and mobile licenses. This guide walks you through what it takes to qualify, apply, and get licensed.

What Is a Class B Sports Betting License in Maryland?

Maryland's Sports Wagering Application Review Commission (SWARC) issues Class B facility licenses to retail sports betting operators. Unlike Class A licenses (held by existing casino and race-track venues), Class B licenses are designed for smaller independent operators or businesses seeking to add sports betting as a revenue stream.

Maryland categorizes Class B licenses into two tiers based on business size:

• Class B-1 license: For applicants who do not meet the B-2 size test.
• Class B-2 license: For an applicant with fewer than 25 full-time equivalent employees or under $3 million in annual gross receipts.

Both license types allow retail sports betting operations at a physical venue. They are distinct from mobile/online wagering licenses, which are issued separately by SWARC and operate through apps and websites.

Current Status: Is There an Open Application Window?

As of 2026, the application landscape for Class B licenses has shifted. Historically, a 45-day application window closed on October 21, 2022, with no immediate plan to reopen. However, Maryland House Bill 1431 (2026) would authorize reopening competitive application windows for additional Class B and mobile licenses. Before investing time and money into an application, you must confirm the current status with SWARC directly.

Action item: Contact the Sports Wagering Application Review Commission to verify whether a Class B application window is currently open. Do not assume availability based on outdated information.

Materials and Information You Will Need

Before beginning your application, gather these documents and information:

• Business formation documents (Articles of Organization, incorporation papers, or equivalent).
• Proof of your business size: recent payroll records, W-2s, or accountant certification of employee count and gross receipts.
• Financial statements, including balance sheets and profit-and-loss statements, in the form SWARC requires.
• Detailed business plan specific to sports betting operations, including floor layout, technology platform, staffing, and compliance procedures.
• Identification and background information for all owners and managers, and for anyone else SWARC names.
• Proof of venue location and right to occupy (lease or deed).
• Any existing professional licenses or gaming permits your business holds.
• A detailed breakdown of initial capital, funding sources, and a statement confirming no illegal funding sources.

Application Fees and Costs

Class B license applications carry a fee at the time of submission:

• Class B-1 license application fee: $250,000
• Class B-2 license application fee: $50,000

These are application fees only, not license fees. Confirm with SWARC whether any part of the fee is refundable. In addition to the application fee, budget for legal counsel (highly recommended, given the complexity of gaming law), accounting services to prepare financial documentation, and potential site improvements or technology platform setup before you are licensed.

Step-by-Step Application Process

Step 1: Confirm Your Eligibility for Class B-2 (if applicable)

If you believe you qualify for the lower-fee Class B-2 tier, document your business size carefully. You qualify if you meet either of these criteria, and you should confirm the exact test with SWARC:

• Fewer than 25 full-time equivalent employees, OR
• Annual gross receipts under $3 million.

Confirm with SWARC how the employee and receipts tests apply if you meet only one of them. Gather accountant-prepared documentation of both metrics. Misrepresenting your size on the application is grounds for immediate denial and potential legal liability.

Step 2: Secure a Venue and Confirm No Proximity Restrictions

Identify the physical location where you plan to operate the sports betting venue. Maryland law may impose distance restrictions near Class A sites (established casino and racetrack licensees). Whether any apply, and the distance and any carve-outs, are not confirmed here. Before signing a lease or making a venue commitment, consult the relevant statute or contact SWARC to confirm whether your proposed location complies with any distance exclusions from Class A licensees.

Obtain a signed lease or deed proving your right to occupy the space. SWARC will verify that you control the venue.

Step 3: Develop Your Business Plan and Operations Manual

Write a detailed business plan that covers:

• Venue description: Square footage, layout, customer capacity, and any existing business type (bar, restaurant, convenience store, etc.).
• Technology platform: Which sports betting provider or software platform you will use (e.g., DraftKings, FanDuel, or another licensed operator). Confirm that your chosen platform is licensed in Maryland and approved for Class B retail.
• Staffing plan: Job titles, responsibilities, and experience requirements. Include your compliance officer and training program details.
• Financial projections: Revenue forecasts, operating costs, and a three-year profit-and-loss projection.
• Responsible gambling measures: Age-verification procedures, staff training on problem gambling, self-exclusion program participation, and signage about gambling risks.
• Anti-money-laundering and compliance protocols: Your procedures to report suspicious activity and comply with federal and state gaming regulations.
• Marketing and customer acquisition plan: How you will acquire customers without targeting minors or violating advertising rules.

Step 4: Prepare Financial and Ownership Documentation

Compile the tax returns, balance sheets, and profit-and-loss statements SWARC asks for. If you are a startup with no operating history, provide a detailed use-of-funds statement showing where capital will come from and how it will be spent.

Create an ownership chart showing all shareholders or members, their ownership percentages, and identification information. Owners and others SWARC names must undergo a suitability review, which can include background checks and criminal history screening. Confirm the ownership threshold with SWARC.

Step 5: Obtain Background Clearance for Owners and Key Managers

SWARC requires a suitability determination for owners and may require one for key operational staff (general manager, compliance officer, etc.). Plan for background checks, which typically include:

• Criminal history check (state and federal).
• Financial suitability review (credit, bankruptcy history).
• Prior gaming or sports wagering violations.

Do not submit your application until all owners and key staff have been vetted by SWARC or have passed initial suitability review. Delays in background clearance are among the most common reasons applications are held pending.

Step 6: Submit Your Application to SWARC

Once an application window is open, SWARC will publish the submission window and format requirements, typically through its official website. Applications must be submitted before the deadline; late submissions are rejected without review.

Include with your application:

• Completed SWARC application form.
• Application fee ($250,000 for B-1, $50,000 for B-2).
• All supporting documents listed in the Materials section above.
• A statement certifying that the information is true and complete, signed by the applicant or authorized representative.

Submit only in the format and through the channel SWARC specifies. Incomplete applications may be rejected outright.

Step 7: Respond to Requests for Additional Information

SWARC may issue deficiency notices asking for clarification or additional documents. Respond promptly, as delays can result in application denial. Common requests include:

• Explanation of gaps in financial records.
• Additional detail on responsible gambling procedures.
• Updated background clearance results if an owner's suitability determination expires during review.

Step 8: Await the License Decision

SWARC reviews applications on a rolling or batch basis depending on the application window structure. The review timeline is not standardized but may take several months. You will receive notice of approval or denial in writing.

Tax Obligations After Licensure

If licensed, you will owe state tax on sports wagering proceeds. Maryland's sports wagering tax rate is tiered by license type:

• Mobile/online licenses: 20% state tax on mobile wagering proceeds (increased from 15% by Chapter 604 of 2025).
• Retail licenses (Class B and Class A): Licensees retain 85% of proceeds, meaning an effective tax rate of 15% on retail sports wagering revenue.

Additionally, head term (counted as a 2% adjustment based on bettor intent) may apply to your tax calculation; consult your accountant and SWARC for how this affects your specific operation.

Confirm tax filing and payment due dates with the state before you open. Failure to file or pay gaming taxes can result in license suspension or revocation.

License Term and Renewal

Class B licenses are issued for a five-year term. Before the license expires, you may apply for renewal; confirm renewal requirements and timing with SWARC well before your license expires.

Common Mistakes to Avoid

• Misrepresenting business size: Overstating or understating employee count or gross receipts to qualify for a specific license tier can result in immediate denial and potential prosecution.
• Incomplete background documentation: Owners with criminal records, unsolved suitability issues, or undisclosed conflicts of interest often derail applications.
• Underestimating capital requirements: Many applicants underestimate the cost of sports betting technology, staff training, and interior buildout. Budget generously.
• Missing the application window deadline: Once the window closes, late submissions are not accepted. Mark the deadline clearly and submit early.
• Failing to confirm proximity restrictions: Building your entire plan around a venue that violates distance rules wastes time and application fees.
• Choosing an unlicensed or unreliable technology platform: The sports betting platform you select must be licensed and operational in Maryland. Verify this before committing to your application.

Tips for Success

• Hire an attorney experienced in Maryland gaming law: The regulatory landscape is complex, and a mistake in the application can cost thousands of dollars and months of delays. An attorney's fee is a worthwhile investment.
• Start background clearance early: Begin vetting owners and key staff well before the application window opens. Suitability reviews can take weeks.
• Build relationships with SWARC staff: Attend pre-application webinars or informational sessions. Regulators appreciate applicants who demonstrate genuine compliance intent.
• Over-document responsible gambling measures: Examiners scrutinize how you will protect minors and problem gamblers. A strong responsible gambling program is a competitive advantage.
• Verify your technology partner is stable: Choose a platform provider with proven Maryland experience and adequate customer support. Switching platforms mid-license can be costly and may trigger regulatory review.
• Plan for post-license compliance: Licensing is the beginning, not the end. Budget for ongoing audit, tax compliance, and staff training.

Expected Results and Realistic Timelines

If your application is approved, how soon you can launch depends on how much venue preparation remains. Approval is not guaranteed. Competitive application processes (the current framework) result in some applicants being denied, particularly if the number of qualified applicants exceeds the licenses available.

Do not assume your application will be approved simply because you meet the minimum eligibility criteria. Confirm with SWARC how competitive applications are evaluated.

Next Steps and Important Disclaimers

This article is informational only and does not constitute legal or tax advice. Maryland sports wagering regulations are complex and subject to change. Before investing in an application or venue, consult with a licensed attorney in Maryland who specializes in gaming law and a certified public accountant (CPA) familiar with Maryland sports wagering taxes.

Additionally:

• Confirm the current status of Class B license availability by contacting SWARC directly or reviewing the Maryland Lottery and Gaming website.
• Review the current version of Maryland's sports wagering statute (referenced in the State Government Article 9-1E-06) for any proximity restrictions, license caps, or requirements not detailed here.
• Verify that your chosen sports betting platform is properly licensed and operational in Maryland before committing to a venue.

The regulatory environment for sports betting in Maryland continues to evolve. What is current today may change by the time you read this. Keep your legal and accounting advisors in the loop as you progress through the application process, and stay informed of any statutory changes by monitoring SWARC announcements and the Maryland General Assembly's legislative calendar.

Resources

• Maryland State Department of Assessments and Taxation (SDAT): State office for forming your business entity.
• Sports Wagering Application Review Commission (SWARC): The regulatory body responsible for approving or denying Class B license applications. Contact SWARC for current application timelines, fee structure, and suitability review procedures.
• Maryland General Assembly Online: Review the full text of State Government Article 9-1E-06 and any recent amendments (such as HB 1431) to understand the current legal framework.
• A licensed Maryland gaming attorney: Essential for complex questions about proximity restrictions, technology platform selection, and compliance procedures.
• A CPA or tax professional with sports wagering experience: Necessary to understand your tax obligations and ensure post-license compliance.