Gov. Wes Moore did not get his wish to see the state’s tax rate on Maryland sports betting operators increase from 15% to 30%. However, the levy licensees pay on the revenues they generate will still go up later this year.
Before the Maryland General Assembly adjourned for the year in April, lawmakers signed off on a budget agreement that raised the sports betting tax to 20%. The new rate will take effect on July 1, the start of the state’s fiscal year.
The budget bills have been sent to Moore for his signature, but he has not yet approved or vetoed the measures, according to the state legislature’s website. In addition, the website indicates the governor can only use line-item veto power on items lawmakers either added or increased. It cannot be used on portions legislators reduced.
Moore wanted to double the sports betting tax as part of his effort to address the state’s budget deficit, which was approaching $3 billion. One measure he did not endorse to reduce the gap was legalizing Maryland online casino gaming.
Why Maryland Sports Betting Operators Opposed Tax Hike
Sportsbooks have opposed raising taxes on them for a variety of reasons. They argue the tax will hurt players by potentially affecting odds on wagers and limiting opportunities for promotional wagers and deposit matches.
The operators also say that the rate change opens the door for players to go to other sportsbooks, such as those based offshore or so-called sweepstakes sportsbooks, neither of which are licensed by Maryland. Those operators don’t pay taxes, either, like online Maryland sportsbook apps do.
Creating A Forecast For Maryland Sports Betting 2025-26
So, how much can the state expect to receive from the Maryland sports betting tax increase? For our estimate, we’ll use a running 12-month summary. While that is not the true fiscal year, it does encompass the latest report for each of the 12 months.
The tax increase comes at a time when there has been significant growth in the Maryland sports betting market. From April 2024 to March 2025, the operators have reported a collective handle of $5,934,739,736. That is up 24% from the $4,787,946,330 wagered between April 2023 and March 2024.
Operator revenues have risen even higher. Over the last 12 months, the sportsbooks have collected $549,926,020, a 61.7% increase from the previous 12 months. As a result, Maryland’s share has risen by the same rate, with taxes derived from sports betting going from $50,909,078 to $82,488,903.
BetMaryland.com doesn’t anticipate another 12 months of a 24% increase in handle. Instead, we’ll opt for a more conservative increase of 10%. That puts the forecasted handle at $7,062,404,546 from April 2025 to March 2026.
Revenues can be trickier to forecast because that depends on bettors’ success. Last month, Maryland sports bettors had their most successful month (5.04% sportsbook hold) since November 2023 (3.82%). From April 2024 to March 2025, the sportsbooks reported a hold, or win rate, of nearly 9.3%. Between April 2023 and March 2024, that margin was 7.1%
So, we’ll split the difference here and go with an 8.2% win rate.
Maryland Should Expect More Tax Revenue, But…
Based on those projections, we estimate a handle of roughly $7.1 billion for the 2025-26 fiscal year, with sportsbook revenues approaching $580 million. A 20% tax would give the state $115.8 million in tax revenue. That’s an increase of 40.4% from what Maryland has received over the past 12 months.
Again, this is just a forecast, and changes in the economy or Maryland sports betting market could require that we adjust that down the road. Such factors would include an economic recession or sportsbooks leaving the market. The latter occurred in Ohio after that state bumped its sports betting tax from 10% to 20%.
BetMaryland.com will continue to monitor the situation out of Annapolis. We’ll also continue to provide the latest news on sports betting and gaming coming from the state, plus real money Maryland sportsbook promo codes you can use when you sign up.
USA Today photo by Tommy Gilligan
