Maryland’s Governor has signed off on a bill that will raise the sports betting tax in the state from July this year.
Gov. Wes Moore signed off on the Budget Reconciliation and Financing Act of 2025 proposed in HB352. Part of the bill increases the tax rate on sports betting from 15% to 20%. Moore had originally proposed a rate of 30%, but after negotiations with lawmakers, the agreed rate of 20% will be implemented.
Sports betting an important source of funds
Moore had identified the growth of Maryland sports betting as a potential source of funds to bridge the $2.7 billion gap in the state’s budget proposal. Of the tax collected from revenue generated by sportsbooks, 95% will be allocated to public education through the Blueprint for Maryland’s Future Fund, while 5% goes to the state’s General Fund.
The state has already been increasing the amount of taxes it collects from wagering on sports due to growth in the industry. In 2024, Maryland’s sports betting handle reached $5.9 billion, a 28.7% increase from 2023. Gross gaming revenue (GGR) for 2024 was $635.7 million, up 23.7% year-over-year.
This led to tax revenue reaching $82.3 million, a 78% increase from 2023. With the additional 5% in place from July, the increase is projected to generate an additional $32 million in revenue for Maryland in the 2026 fiscal year.
Hike opposed by sportsbooks
Moore put forward a 30% tax as “sound tax policy”, but sportsbook operators expressed concerns that it would reduce the amount of promotions they can run and drive bettors to offshore sportsbooks.
Flutter CEO Peter Jackson commented, “If you push taxes too high, then people … will use illegal operators and tax revenues [will] go down.”
In states with tax rates exceeding 30%, DraftKings introduced a 3-4% tax of their own on winning bets to offset the burden. This affects bettors in the states with the highest rates, New York, Illinois, Pennsylvania, and Vermont.
Ohio doubled its tax rate from 10% to 20% and reaped the benefits by collecting 35.7% more revenue, $180.8 million from $133.3 million in 2023. Despite a 15% increase in betting handle, $7.7 billion up to $8.9 billion, operators reported $899.4 million in revenue, a 4% decrease from $936.5 million in 2023.
Lawmakers in Ohio are eyeing further funds from betting with a proposed tax on betting handle, as well as bills legalizing online casinos introduced this week. Tennessee currently taxes betting handle at 1.85%, but Ohio would become the first state to tax both betting handle and revenue.
The increased tax hike comes with news last month that the city of Baltimore is suing major sportsbooks, FanDuel and DraftKings over their marketing practices. Time will tell whether that and the new tax rate reduce the growth Maryland has seen in sports betting over the past few years.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling.
