Maryland lawmakers are weighing a proposal that could stretch the state’s gambling laws well beyond its borders, potentially pulling web hosts, payment companies and platform providers around the world into its enforcement net.
House Bill 1226, titled the Maryland Illegal Online Gambling Enforcement Act, would let the Attorney General issue cease-and-desist orders to any sweepstakes operator accused of offering or promoting illegal online gambling in the state. It also requires the Attorney General to keep a public list of website URLs that have received those orders, effectively creating a blacklist that others would be expected to follow.
Under the bill’s language, a platform provider is defined broadly as any company that stores or hosts content on a web server and makes it accessible online. Financial transaction providers, including payment processors and credit card issuers, are also explicitly covered.
That reach is what stands out to legal observers.
“It’s pretty far reaching,” said Robert L. Ruben, a partner at Duane Morris LLP and a gaming law expert, in an interview with ReadWrite.
Maryland online gambling bill jurisdiction questions and criminal penalties
Ruben pointed to a key distinction in how the bill treats operators compared with platform providers.
“If you notice there’s a difference in the provisions of the bill regarding an operator versus a platform provider or someone else,” Ruben said. “For the operator, the provision says that you’re submitting to the jurisdiction only if you knew or should have known that what the bill refers to as illegal online gambling is occurring in the state. But for the platform provider, it does not have that language.”
It’s not completely unprecedented that a regulator would claim jurisdiction over an entity that’s unaware that its products are being offered in a particular state. But again, I haven’t seen it before in gaming in a criminal context like this.
Robert L. Ruben, Duane Morris LLP partner
The measure states that an out-of-state platform provider whose service allows for online exchanges to or from people physically located in Maryland submits to the jurisdiction of Maryland courts. It also says platform providers and financial transaction providers are deemed to have constructive knowledge of websites identified by the Attorney General.
The structure, Ruben said, could create enforcement and due process challenges, especially because the bill carries criminal penalties.
“I think that could be problematic from an enforcement perspective, particularly a statute that carries criminal consequences,” Ruben said. “If you don’t know that software is somehow being used by somebody else, I think enforcement could be difficult under U.S. law.”
For operators, a first violation could mean up to three years in prison or a $50,000 fine, rising to $100,000 for subsequent violations. Each wager is treated as a separate offense. Platform providers face escalating daily fines if they fail to comply with blocking orders.
Ruben stresses that the bill includes a compliance window
“In most if not all cases under this bill, those penalties don’t kick in unless you fail to cease within the 10-day period,” he said. “So before they impose those harsh penalties, they are providing an opportunity to come into compliance.”
The proposal also squarely targets sweepstakes-style platforms, defining them as games that use a dual-currency system and simulate casino play. Similar legislative fights are unfolding in states including Florida, Indiana and Illinois, where industry groups such as the Social Gaming Leadership Alliance have argued that expansive bans risk sweeping in legitimate promotional models and skill-based offerings.
As drafted, HB 1226 has a companion measure in the Senate, a routine step in Maryland’s legislative process. Lawmakers would need to reconcile both versions before sending any final bill to the governor.
For now, the bill has sparked debate over how far a single state can go in trying to police the global internet.
As he put it, “I haven’t seen it before in gaming in a criminal context like this.”
Ruben said he would prefer to see the bill give prosecutors clearer discretion, especially in cases where any violation is inadvertent rather than intentional. He also flagged what he called a “curious” tension in the definitions section.
While the bill’s definition of online gambling includes “games, sweepstakes games, games of chance, and any other game typically offered in a casino,” the definition of a wager refers to placing money at risk on an outcome determined by “skill, chance or elements of skill and chance.”
This creates a potential conflict, he suggested, because the definition of illegal online gambling focuses on games of chance, not games of skill. “If the intent, and it’s not clear to me, if the intent is to render illegal gains of skill, that is in conflict with, you know, decades and decades of Maryland case law that a game of skill is not illegal gambling,” Ruben said.
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