High stakes, higher taxes: Maryland signs sports betting tax hike into law
Maryland has officially joined the wave of U.S. states rethinking how they tax mobile sports betting. As of the latest legislative move, the state has increased its online sportsbook tax rate from 15 percent to 20 percent.
Proposed doubling the tax rate earlier
Originally, Moore sought to double the rate to 30 percent in a bid to close a projected budget deficit of $3.3 billion. His January budget proposal also called for an increase in the tax on table games from 20 to 25 percent. However, the governor/legislature abandoned that idea. The 20 percent rate on table games will remain untouched.
State lawmakers eventually negotiated a more modest increase to 20 percent, which has currently been greenlighted. The argument was that doubling the tax would have certain adverse effects. Lawmakers feared that such a steep hike might discourage operators, leading them to reduce operations or cut promotional spending. Some legislators supported the move, arguing that a 20 percent rate would still boost public funds without scaring off businesses and align with the tax rates in other states like Ohio and Illinois. On the other hand, industry stakeholders warned that higher taxes might shrink margins, reduce competitive incentives, and ultimately lead to a less engaging experience for users.
Maryland’s General Assembly has now passed , which officially increases the tax rate on online sportsbooks to 20 percent. This law applies solely to mobile betting operations and will not affect in-person betting. Introduced as a part of the 2025 Budget Reconciliation and Financing Act, the measure would use the extra money to support a variety of initiatives. The measure also changes how the revenue is allocated. Five percent of all tax revenue from sports betting will now go into Maryland’s General Fund, while the rest is earmarked for education.
Wave of U.S. states rethinking taxing mobile betting
Maryland is not alone in pursuing higher taxes on sports betting. Across the country, several states have already enacted increases, with more proposals currently under review. Ohio raised eyebrows in 2023 by doubling its sports-betting tax rate from 10 to 20 percent. Now, Governor Mike DeWine is pushing to double it again. His latest budget plan includes a proposed increase to 40 percent, marking a dramatic rise in just three years.
Last year, Illinois followed a different path, introducing a tiered system that taxes sports-betting revenue between 20 and 40 percent, depending on operator earnings. That replaced the state’s former flat rate of 15 percent. In New Jersey, Governor Phil Murphy is also drawing fire for his proposed 25 percent tax rate on both mobile sports betting and online 바카라 gaming. His February budget announcement triggered concerns from industry leaders, who say the hike could destabilise a mature market.
