Maryland Caps Online Sportsbook Tax Increase at 20%

Maryland’s Decision on Online Sportsbook Tax

• Maryland decides against increasing the online sportsbook tax, opting for a modest 5% rise instead.
• This decision means that online sportsbooks are now required to pay 20% of their revenue, an increase from the previous 15%.
• Initially, Maryland aimed to elevate the online sportsbook tax to 30%.

Maryland has been closely scrutinizing its gambling sector. The state has targeted the sweepstakes social casinos with plans to ban them entirely, in addition to proposing a higher tax rate for online sportsbooks.

However, the state has demonstrated a willingness to compromise. The Maryland House of Delegates’ Ways and Means Committee voted on House Bill 352, known as the ‘Budget Reconciliation and Financing Act of 2025.’ This bill effectively dismissed the original proposal to increase the online sports betting tax to 30% from the present 15%.

Online Sportsbook Tax Increase Capped at 20% for 2025

In a 13-5 vote, the bill was approved with a significant amendment – the online sports betting tax would rise only to 20%, instead of the initially proposed 30%. This proposal was first introduced by Gov. Wes Moore in early January.

Lawmakers listened to industry representatives who cautioned that excessive taxation could impair their ability to contribute to state revenues and maintain a competitive market that offers top-notch services to players. They also highlighted the risk of driving business to the black market.

There is a silver lining to the vote, as the gambling taxes for casinos will remain unchanged. Gov. Moore had also suggested increasing the current 20% tax on casino properties to 25%, but this idea was ultimately discarded.

Gambling Tax Increases: A Trend Across US States

Gambling tax hikes are a recurring theme in this legislative session. Ohio is another state considering a tax increase, contemplating raising the current sportsbook revenue tax rate from 20% to 40%.

This proposal by Gov. Mike DeWine has faced strong opposition from major operators like BetMGM, DraftKings, Fanatics, and FanDuel. These companies, through their trade group, The Sports Betting Alliance, have warned against excessive tax increases.

Nonetheless, Maryland’s pragmatic approach could serve as a model for other states.

As states continue to clamp down on illegal gambling, customers are less likely to turn to offshore markets, even if they encounter slightly less favorable odds due to tax hikes. This counters one of the primary arguments operators use against tax increases.