Maryland Governor Proposes Major Tax Hike for Sports Betting Operators
Maryland Governor Wes Moore has unveiled a budget proposal that includes a significant tax increase for sports betting operators in the state. The proposed tax rate for legal sports betting sites in Maryland would double from 15% to 30%. This move is in line with efforts by other states with legal sports betting to revisit their tax rates in order to maximize revenue from the industry.
The tax hike is aimed at bringing Maryland’s tax rate more in line with neighboring states, such as Pennsylvania and New York, which have tax rates of 36% and higher than 50% respectively. Despite launching legal sports betting in late 2021 and generating over $135 million for education and problem gambling programs, Maryland lawmakers are looking to extract more revenue from the industry.
Similar attempts to raise tax rates in Massachusetts and New Jersey have not been successful, while hikes in Ohio and Illinois have seen some success. The proposed tax increase has prompted the industry to consider changes such as reducing free bets and promotions. DraftKings even toyed with the idea of a “gaming tax surcharge” on winning bettors in higher-tax jurisdictions.
As the budget proposal heads to the legislature for consideration, Maryland sports betting regulators are also taking steps to increase revenue, including eliminating promo deductions for operators and cracking down on illegal entities operating in the state. The state is also considering the legalization of online casino gambling this year.
Industry lobbyists are expected to push back against the tax hike, and the outcome of the debate remains uncertain. However, the trend of states reevaluating their tax rates for sports betting indicates a growing focus on maximizing revenue from this rapidly growing industry.
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