Maryland Governor Wes Moore (D) has unveiled his plan to address the state’s $3 billion deficit, which includes a proposed hike in the state’s sports betting tax rate. 
One of the key components of the governor’s plan is a substantial increase in the state’s sports betting tax rate. Moore has proposed raising it from 15 percent to 30 percent, effectively doubling the existing rate. 

Our budget is a strategy to address Maryland's fiscal crisis by growing our state's economy.

Our proposal will create good-paying jobs, reduce spending by $2 billion, and give nearly two-thirds of Marylanders a tax cut.

— Governor Wes Moore (@GovWesMoore)

As part of his budget proposal, Moore outlined measures to reduce government spending by $2 billion, while also introducing higher income taxes for residents earning more than $500,000 and $1 million annually.

Casino tax rates set to rise 

Additionally, the tax rate on casino table games is set to rise from 20 percent to 25 percent.

According to the Associated Press, the proposed changes are expected to generate approximately $985 million in new revenue. 

If approved, Maryland’s sports betting tax rate would be among the highest in the nation, trailing only New York, New Hampshire, Rhode Island, Pennsylvania, and Vermont, all of which have rates exceeding 30 percent.

The proposed increase in Maryland’s sports betting tax rate, although significant, is in line with the tax rates in many neighbouring states of U.S, which are considerably higher. For example, Pennsylvania taxes sports betting operators at 36 percent, and New York’s rate exceeds 50 percent.

This move is part of ongoing discussions across the U.S. regarding the appropriate level of taxation for the rapidly expanding sports betting sector. 

While states like Ohio and Illinois have successfully raised their rates, similar efforts in Massachusetts and New Jersey have faced resistance.

The tax hike has already raised concerns in the sports betting industry, with operators likely to increase lobbying efforts against the change, similar to actions taken in other states. 

For instance, DraftKings had previously proposed a “gaming tax surcharge” for bettors in high-tax jurisdictions, though it was eventually abandoned.

Lawmakers may reject proposal 

The future of the proposal is uncertain, as it must pass through the state legislature, where lawmakers may amend or reject the increase. 

Additionally, Maryland’s regulators are working to maximise revenue by eliminating promotional deductions for operators and tightening regulations on illegal and offshore gambling sites.

Since launching legal sports betting in December 2021, Maryland’s market has exceeded expectations. In the first five months of fiscal year 2024, the state reported over $4 million in sports betting tax revenue, which is allocated to the Blueprint for Maryland’s Future fund, supporting educational initiatives across the state.

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