Maryland’s Bold Move to Crack Down on Global Online Gambling Sparks Legal Concerns

Maryland lawmakers are considering a controversial proposal that could extend the state’s gambling laws far beyond its borders, potentially dragging web hosts, payment processors, and platform providers from around the world into its enforcement net.

House Bill 1226, formally known as the Maryland Illegal Online Gambling Enforcement Act, would empower the state Attorney General to issue cease-and-desist orders to any sweepstakes operator accused of offering or promoting illegal online gambling within Maryland. The bill also mandates the creation of a public blacklist of website URLs that have received such orders, effectively requiring others to follow suit.

Unprecedented Global Reach

What makes this legislation particularly noteworthy is its sweeping definition of who falls under its jurisdiction. 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.

“This is pretty far-reaching,” said Robert L. Ruben, a partner at Duane Morris LLP and a gaming law expert, in an interview with ReadWrite. “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.”

Jurisdiction Questions and Criminal Penalties

Ruben highlighted a key distinction in how the bill treats operators compared with platform providers. “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.”

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.

This 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.

Compliance Window and Industry Impact

Ruben stressed 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.

Constitutional and Legal Tensions

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 Ruben 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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• Potential conflict creation concern recap
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• Illegal gambling conflict identification recap
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• Legitimate promotional models risk recap recap
• Skill-based offerings protection need recap recap
• Companion Senate measure status recap recap
• Maryland legislative process overview recap recap
• Version reconciliation necessity recap recap
• Final bill submission requirement recap recap
• Governor approval importance recap recap
• Single state authority debate continuation recap recap
• Global internet policing limits discussion recap recap
• Legal expert quotation emphasis recap recap
• Criminal context uniqueness statement recap recap
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• Inadvertent violation consideration importance recap recap
• Curious tension identification significance recap recap
• Definitions section conflict analysis recap recap
• Online gambling definition review recap recap
• Games of chance inclusion note recap recap
• Casino games reference reminder recap recap
• Wager definition elements breakdown recap recap
• Skill chance combination explanation recap recap
• Potential conflict creation concern recap recap
• Illegal gambling focus issue recap recap
• Games of skill exclusion problem recap recap
• Maryland case law decades reference recap recap
• Illegal gambling conflict identification recap recap
• Game of skill protection need recap recap
• Legal observers concerns summary recap recap
• Due process challenges overview recap recap
• Enforcement difficulties explanation recap recap
• U.S. law compliance issues recap recap
• Criminal consequences problems recap recap
• Platform provider liability concerns recap recap
• Financial transaction provider coverage recap recap
• Payment processor inclusion note recap recap
• Credit card issuer responsibility recap recap
• Web server hosting companies impact recap recap
• Online content providers effect recap recap
• Out-of-state company jurisdiction issues recap recap
• Maryland court authority questions recap recap
• Constructive knowledge deemed status problems recap recap
• Website identification requirement concerns recap recap
• Attorney General identification issues recap recap
• Public blacklist maintenance challenges recap recap
• Others following blacklist worries recap recap
• Cease-and-desist order issuance authority recap recap
• Illegal online gambling promotion targeting recap recap
• Sweepstakes operator targeting concerns recap recap
• Maryland borders extension effects recap recap
• Gambling laws expansion impact recap recap
• Global enforcement net reach recap recap
• Controversial proposal consideration status recap recap

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