Maryland Gov. Wes Moore is proposing a major tax hike for sports betting operators in the Old Line State.
The governor’s latest budget proposal, unveiled during a press conference on Wednesday, includes a doubling of the tax rate that legal sports betting sites in Maryland are subject to, ratcheting it up to 30% from its current 15%.
“Seems like a big jump, but many of our neighboring states are significantly higher than 15% today,” said Helene Grady, Moore’s budget and management secretary. “Pennsylvania is at 36% and New York is even higher, north of 50%.”
Legal sports betting in Maryland launched in late 2021, and operators have since contributed more than $135 million toward education and problem gambling programs via the 15% tax rate.
Nevertheless, the latest budget proposal continues the trend of lawmakers in states with legal sports betting deciding to revisit their tax rates in the hopes of squeezing more out of an industry that continues to come under fire for its advertising and perceived impact on society.
Oh boy. As noted by others, Maryland Gov. Wes Moore is proposing to hike the state's sports wagering tax rate to 30% from 15% as a way to either bring it "in line with its neighbors or better align the State with the principles of sound tax policy." pic.twitter.com/aCleXa5gPs
— Geoff Zochodne (@GeoffZochodne) January 15, 2025
Moore’s proposal follows similar (albeit failed) attempts in Massachusetts and New Jersey to boost tax rates there, as well as successful hikes in Ohio and Illinois.
The tax tweaks have prompted the industry to up its lobbying game and consider business changes, such as fewer free bets and promotions. DraftKings even took the dramatic step last year of unveiling a plan for a “gaming tax surcharge” on winning bettors in higher-tax jurisdictions, which the Boston-based bookmaker ultimately dropped.
Unleash the lobbyists
What the industry does in response to Moore’s proposal for the 2026 fiscal year remains to be seen, although it will likely involve pushing back. The governor’s budget plan will head to the legislature where lawmakers could try to tweak its provisions, including the doubling of the sports wagering tax rate.
In the meantime, Maryland sports betting regulators are taking steps that could provide more revenue on their own, such as by proposing to eliminate promo deductions for operators. Furthermore, the regulator is aiming to shutter offshore and illegal entities that are doing business in the state.
The Maryland Lottery and Gaming Control Agency reported on Wednesday that it sent cease-and-desist letters to 11 such operators and that six had responded, albeit none of which agreed to block access to their sites. The regulator plans to send follow-up letters and is now contacting payment processors, “demanding that they block access.”
Maryland lawmakers are also set to again debate the potential legalization of online casino gambling this year.
