Maryland Agrees on Lower Tax Hike for Online Sportsbooks

A deal has been reached between state lawmakers and Maryland Governor Wes Moore about the proposed tax increase for online gambling. Moore’s initial proposal was to double the tax rate from 15% to 30%. But lawmakers ultimately agreed on a relatively moderate rise of 20% after deliberations.

During a hearing of the Ways and Means Committee of the House of Delegates, the amended proposal surfaced. The committee voted 13-5 to accept the amended version of House Bill 352. Public services will be supported by the state’s general fund, which will receive the additional cash from the new rate.

Balancing Tax Policy and Operator Interests

Governor Moore had previously justified the steeper tax hike by pointing to neighboring states with higher rates and emphasizing the need for a “better align[ment] with the principles of sound tax policy.” However, considering the economic impact on operators and competitiveness, the final decision reflects a more cautious approach.

Maryland’s sports betting industry has contributed approximately $150 million to education since its launch in late 2021 under the current 15% tax rate. Reducing the proposed increase offers some relief to operators while ensuring additional funds for state programs.

Reflecting on similar situations, lawmakers may have taken note of Illinois’ recent tax increase and the resulting industry concerns. Additionally, neighboring states like Ohio and New Jersey are facing pushback over their proposed tax hikes, further influencing Maryland’s decision.

While the adjusted sportsbook tax rate moved forward, another of Moore’s proposals faced rejection. The Ways and Means Committee voted against raising the tax on casino table games from 20% to 25%, maintaining the current rate.

Governor Moore highlighted the broader benefits of the budget agreement. On Twitter/X, he stated, “Under this agreement, 94% of Marylanders will either get a tax cut or see no change in their income taxes. And, yes, we’re asking those who have done exceptionally well to pay more to support the best schools in the country, our law enforcement, and our firefighters.”

With a balanced tax adjustment in place, Maryland aims to generate additional revenue without placing excessive strain on operators. The decision showcases a collaborative effort to maintain a thriving sports betting market while supporting public services.