Maryland Governor proposes major tax hike for sports betting operators
Governor Wes Moore’s budget plan aims to double the sports betting tax rate to 30 per cent, in line with neighbouring states’ higher taxes.
US.- Maryland Governor Wes Moore has proposed a significant increase in the tax rate for sports betting operators in the state, a move that could reshape the industry in Maryland. The governor’s budget proposal, unveiled during a press conference on Wednesday, calls for the sports betting tax rate to double from its current 15 per cent to 30 per cent.
While the hike may seem steep, it is in line with tax rates in neighbouring states, many of which are significantly higher. “Seems like a big jump, but many of our neighbouring states are significantly higher than 15 per cent today,” said Helene Grady, Moore’s budget and management secretary. She pointed out that Pennsylvania taxes sports betting operators at 36 per cent, while New York’s tax rate exceeds 50 per cent.
Maryland’s sports betting market launched in late 2021, and since then, operators have contributed over $135m towards education and problem gambling programs through the current 15 per cent tax rate.
Despite this, the governor’s proposed increase reflects ongoing debates among lawmakers across the U.S. regarding the appropriate level of taxation for the rapidly growing sports betting industry. Some states, like Ohio and Illinois, have successfully raised their rates, while efforts to do the same in Massachusetts and New Jersey have failed.
See also: Maryland sports betting handle reaches $637.3m in December
The proposal to raise the tax rate has already sparked concerns within the sports betting industry. Operators are likely to ramp up lobbying efforts, pushing back against the changes, as they have done in other states. For example, DraftKings last year proposed a “gaming tax surcharge” on bettors in high-tax jurisdictions, though it ultimately scrapped the idea.
What will happen next is uncertain, as Moore’s proposal will need to go through the state legislature where lawmakers could amend or even reject the tax increase. In addition, Maryland’s regulators are working to ensure more revenue by eliminating promotional deductions for operators and cracking down on illegal and offshore gambling sites.