Maryland Could Be Next To Hike Sports Betting Tax

There’s a new trend flooding the world of legal sports betting — increased taxes on revenue. Many states have either done it already or thought about it just in the last year. Now Maryland is doing the same. Keep reading and we’ll tell you what’s going on inside the Old Line State.

Maryland Proposes To Double The Tax

For one reason or another, the state of Maryland is $3 billion in the hole budget-wise. That’s not a small deficit in the slightest, and because of that, the state is considering several ways to make it up. One way? Yep, increase the sports betting tax — and big time so.

Get this, the state wants to double the tax. It’s currently 15 percent and under this change, it would be 30 percent flat on all sports betting revenue. This is certainly not as steep as New York’s betting tax of 51 percent, but still, it’s quite the leap.

Don’t you think the public has any say on this either. Maryland Governor Wes Moore added it to his budget for fiscal year 2026. The plan included a host of other things to address the staggering deficit including a higher tax rate for individuals earning at least $500,000.

“When budgets are tight, our top priorities come more into focus and analyzing results is key to ensuring the state government is working for Marylanders,” said Moore. “The administration has proposed a package of very difficult tradeoffs, and we look forward to a continued conversation with the General Assembly and the Maryland public.”

Nothing is official yet, but it’s almost a foregone conclusion that the proposal will be accepted, at least the sports betting tax part of it. If so, it would go into effect on July 1, 2025 — the start of the 2026 fiscal year for Maryland.

Estimating How Much Maryland Could Make With Tax Hike

Here’s the next question that matters, with the higher tax rate, how much more money does Maryland stand to make? We can make an educated guess based on recent data the state has posted.

Just recently, Maryland reported that bettors wagered over $637 million during the month of December. That was about $2 million away from the all-time, single-month record, which ironically, was set in November 2024. However, due to strong bettor performance, the state’s revenue — as in the money they keep — was $43 million, down from the $78 million in the month before. But based on a 15 percent tax, the state only kept $6 million in December. Under this new rate, that number would double to $12 million.

Zooming out, during the entirety of 2024, Maryland’s betting handle exceeded $5.94 billion. Revenue? A whopping $548 million. That amounted to $82 million in take-home tax for the state. That’s nice, but again, a whopping $164 million sure would be nice, but wouldn’t it?

The governor, when proposing the increased tax, was slightly more modest with their estimates. They believe this change could create $95.4 million in fiscal year 2026. Honestly, he’s selling himself short.

That’s because sports betting in Maryland is showing no signs of slowing down. None. When you compare 2024 to 2023 (the first full year that Maryland has legal betting), the differences are staggering. Handle was up 28 percent in 2024, and revenue skyrocketed by 78 percent year-over-year. The trend is pointing up, and we could see the state threaten to take home close to $200 million with the new tax rate.

Tax Jumps Are Becoming The Norm

We’ll probably be writing articles like this one more and more often. There was an inflection point back in the middle of 2024. That’s when Illinois ditched its 15-percent tax rate in favor of a sliding scale tax that can reach as much as 40 percent for the top sportsbook operators. Those bookies did huff and puff about the increase but eventually succumbed.

States saw that — both the big jump in taxes and little pushback from operators — and are now doing the same. In Louisiana, a bill was floated around to skyrocket the tax from 15 percent to 51 percent. This bill faces some opposition so it’s not a closed deal, but you see some lawmakers are getting carried away. In Michigan, there’s also been talks of increasing taxes by 1 percent or so. Yes, you read that right, just 1 percent. It’s certainly less greedy than Louisiana, but at the same time, what’s the point of a measly 1 percent jump?

Either way, the trend is clear as day: we’ll continue to see sports betting taxes. The reason is two-fold. For one, betting activity has blown out expectations countrywide. It’s not just Maryland. Almost across the board, the year-over-tear growth of the industry is double digits. That makes it ripe for taxing since lawmakers undersold how popular gambling was going to be. Call it a “market correction.”

Reason two is government incompetence. Again, Maryland isn’t the only one with a budget deficit. You see the same issue in a plethora of other states, many still stemming from the pandemic. This makes us confident that tax rates will continue happening in the near future.