Maryland Sports Betting Tax Raised In 2026 Budget
It will cost Maryland sports betting operators a bit more in taxes once the new fiscal year starts July 1.
Gov. Wes Moore signed the Budget Reconciliation and Financing Act of 2025 late last month, a bill that raised the Maryland sports betting tax by five percentage points to 20% from 15%.
Retail sports betting revenue remains taxed at 15%, all of which goes to the Blueprint for Maryland’s Future Fund, which supports public education. The fund will receive 95% of online sports betting taxes, and the remaining 5% will go to the state’s general fund.
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A compromise in effect
Moore introduced a proposal to increase gambling taxes as part of an effort to reduce the state’s $2.7 billion budget deficit. His proposed budget included doubling the sports betting tax rate to 30% and increasing the tax on casino table games to 25% from 20%.
Legislators said no to both, but only partially to sports betting. The House Ways and Means Committee voted 13-5 on increasing the state’s sports betting tax to 20% rather than doubling it.
The bill passed through both chambers and Moore signed it, despite its amendments. In doing so, Maryland became the first state to confirm a sports betting tax hike in 2025.
Maryland online casino legislation fizzles out
Discussions of legalizing Maryland online casinos have surfaced since online sports betting went live in November 2022. Three legislative sessions later, Maryland remains on the iGaming sidelines.
And the Old Line State will stay there for another year.
Momentum increased through 2024, with Del. Vanessa Atterbeary’s online casino bill passing through the House. Sen. Ron Watson led the charge in the Senate, but the bill did not receive enough support.
This year, Atterbeary and Watson introduced new pieces of legislation, but neither received enough support to pass their respective chambers.
Online casino tax revenue dwarfs sports betting tax revenue in states offering both, such as Michigan, New Jersey and Pennsylvania. That prospective tax money could put a dent in the state’s deficit, but it won’t happen for at least another year.
More tax increases coming?
Only one other state has been successful in raising its sports betting taxes so far. Illinois approved a 25-cent per bet tax in its budget, which doubles to 50 cents per bet on each bet beyond 20 million for the year.
While Maryland was the first to enact a bump to its sports betting tax this year, it wasn’t the first overall. Ohio doubled its initial 10% tax rate to 20%, just six months after its January 1, 2023, launch.
Ohio, the fourth-largest market in the nation by handle ($8.8 billion in 2024), collected more than $180 million in taxes for the year. Gov. Mike DeWine unsuccessfully attempted to double the rate again, but a new bill could institute an additional 2% handle tax on the state’s sports betting activity.
The Buckeye State is not alone, either. Michigan and Indiana had similar discussions that began to surface in their 2025 legislative sessions, setting the stage for next year.
Louisiana could also enact a tax increase in 2025. The House passed a bill to raise online sports betting taxes to 21.5% from 15%, and it now awaits a Senate decision.
