Maryland Lawmakers Scale Back Online Sports Betting Tax Hike

planned tax increase on online sportsbooks. Initially, Moore’s proposal sought to double the current 15% tax rate to 30%, but a recent legislative development suggests a revised rate of 20% instead.

Adjusting the Tax Rate

In January, Moore introduced a budget plan that aimed to raise the tax on Maryland’s online sportsbooks from 15% to 30%. This proposal was intended to align Maryland’s tax structure with neighboring states and promote what officials described as “sound tax policy.” However, during a meeting of the Maryland House of Delegates’ Ways and Means Committee on Thursday, lawmakers signaled their for a lower tax increase, settling on a 20% rate.

The committee approved an amended version of House Bill 352, known as the “Budget Reconciliation and Financing Act of 2025,” in a 13-5 vote. Originally, this legislation had retained the governor’s 30% tax rate proposal for online sportsbook operators. However, following Thursday’s modifications, the proposed tax increase was reduced to 20%.

The additional revenue generated from the tax adjustment would be allocated to Maryland’s general fund, lawmakers confirmed. While still an increase from the current rate, the new proposal represents a significant reduction from Moore’s initial plan, which could lead to considerable savings for operators in the state.

Maryland legalized sports betting in late 2021, and since then, both retail and mobile operators have contributed approximately $150 million toward education funding under the 15% tax rate. The decision to scale back the tax increase may reflect lawmakers’ reconsideration of the economic impact of a steeper hike, particularly following Illinois’ significant increase in sports betting taxes last year.

Broader Context for Gaming Taxation

Maryland’s decision to moderate the tax hike follows trends in other states where officials have approached sportsbook taxation with caution. In Ohio, lawmakers have shown little interest in another tax increase beyond the current 20% rate. Meanwhile, New Jersey Governor Phil Murphy has faced pushback regarding a proposed tax hike in his state.

Additionally, Maryland legislators have dismissed another gaming-related tax increase. The Ways and Means Committee voted against raising the tax on casino table games from 20% to 25%, effectively removing that proposal from the budget framework.

Governor Moore, along with House Speaker Adrienne Jones and Senate President Bill Ferguson, announced that they had finalized a broader budget agreement. Moore emphasized that under this plan, most Marylanders would not see an increase in their income taxes.

“Under this agreement, 94% of Marylanders will either get a tax cut or see no change in their income taxes,” Moore stated on Twitter/X. “And, yes, we’re asking those who have done exceptionally well to pay more to the best schools in the country, our law enforcement, and our firefighters.”

Source:

‘’Maryland lawmakersagree to water down sports betting tax hike’’, cdcgaming.com, March 21, 2025.