Get 125% / $2,500 on 1st deposit!
New players only. Exclusive Welcome Bonus of up to $2,500
Wes Moore, the governor of Maryland, has proposed a bold plan to raise the state’s sports betting tax rate from 15% to 30%. As a component of his larger budget proposal, this action aims to bring Maryland into line with its neighbors while increasing state revenue to fund a range of public initiatives.
According to Helene Grady, Maryland’s budget and management secretary, the state’s current tax rate lags behind those of nearby regions. She explained, “Seems like a big jump, but many of our neighboring states are significantly higher than 15% today.” For context, Pennsylvania taxes sports betting operators at 36%, while New York’s rate exceeds 50%. This discrepancy has prompted Governor Moore to push for the higher tax rate as part of his strategy to tackle Maryland’s financial challenges.
Since its launch in late 2021, Maryland’s sports betting market has contributed about $128 million to education and problem gambling programs. However, if the new 30% rate is adopted, the state could have generated more than double that amount, potentially exceeding $256 million. This additional revenue would significantly impact funding for various state initiatives.
Despite the potential for increased revenue, the proposal is expected to face strong opposition from sports betting operators. As seen in other states, such as Illinois and Ohio, the industry often lobbies against higher tax rates. For instance, DraftKings had previously considered a “gaming tax surcharge” for bettors in high-tax areas, though it ultimately abandoned the idea. Similar resistance is likely in Maryland as operators attempt to shield themselves from the tax burden.
The proposal will require approval from the Maryland state legislature. Lawmakers may amend or reject the measure based on industry concerns and political dynamics. Additionally, Maryland regulators are exploring other ways to increase revenue, including eliminating promotional deductions for operators and cracking down on illegal offshore gambling activities.
The $3 billion budget imbalance in the state is being addressed by Governor Moore in a number of ways, including this tax increase. Spending reductions and higher income taxes for those making over $500,000 a year are also part of his plan.
Maryland’s proposed sports betting tax rate, if approved, would be among the highest in the country, only surpassed by proposed York and Pennsylvania. Revenues from the market, which topped $40 million in the first five months of fiscal year 2024, demonstrate the sports betting industry’s increasing significance to Maryland’s financial stability as it continues to flourish in the state.