Maryland reaches compromise, set to increase gambling tax to 20%

• Maryland demurs in online sportsbook tax increase, and settles for 5%
• This means that online sportsbooks may now pay 20% of their revenue instead of the current 15%
• Originally, Maryland wanted to push the online sportsbook tax to 30%

Maryland has been paying a closer eye to its gambling industry. The state has gone after the sweepstakes social casinos, planning to outlaw them altogether, as well as proposed an increase in the tax charged to online sportsbooks.

However, the state has also proven open to compromise after the Maryland House of Delegates’ Ways and Means Committee decided to vote on House Bill 352, named the " Budget Reconciliation and Financing Act of 2025" which seems to have dealt away with an originally proposed sports betting online tax increase to 30% from the current 15%.

Proposed 30% tax on online sportsbook will not happen in 2025

In a 13-5 vote, the bill was passed with one notable point – that online sports betting tax would indeed increase, but only to 20% instead of the originally proposed 30% which Gov. Wes Moore first floated as an idea in early January.

However, lawmakers have remained open to the warnings of the sector, which argued that over-taxing the industry would make it harder for them to maintain their contributions to the state coffers and ensure a competitive market in which players get the best possible service, citing a threat from the black market as well.

If there is any good news from the vote, though, it has to do with the fact that casinos’ gambling taxes will remain unchanged. Gov. Moore similarly sought to up the current 20% of tax charged to casino properties up to 25%, but this proposal seems to have been thrown out altogether.

US states caught by sports gambling tax hike fever

Yet, gambling tax hikes are not uncommon in this legislative session. Ohio, another state where gambling tax increases have been a common sight, is toying with the idea of raising the current tax rate on sportsbook revenue from the current 20% to 40%.

The proposal pitched by Gov. Mike DeWine has been opposed firmly by the likes of BetMGM, DraftKings, Fanatics, and FanDuel, and specifically through the businesses trade group, The Sports Betting Alliance which has cautioned against unwieldy tax hikes.

Regardless, Maryland has shown pragmatism and could perhaps serve as a blueprint for other states.

With states getting on top of illegal gambling however, it’s not very likely that customers will choose to go to the offshore market, even if they get slightly worse lines due to tax increases, which is what operators maintain as one of their arguments against tax hikes.

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