The price of doing business in Maryland is officially going up for online sportsbook operators.
Key Insights
- Maryland Gov. Wes Moore has signed a bill into law that includes a tax hike for mobile sportsbook operators.
- The new tax rate for those operators will be 20%, instead of 15%.
- Moore had initially sought to increase the rate to 30% before lawmakers settled on 20% in a "Budget Reconciliation" bill.
Among other pieces of legislation, Maryland Gov. Wes Moore on Tuesday signed into law House Bill 352, the Budget Reconciliation and Financing Act of 2025. In doing so, the governor guaranteed a tax hike for mobile bookmakers in the Old Line State.
The version of H.B. 352 that Moore signed includes an increase in the tax rate for mobile sports wagering licensees, boosting it to 20% from 15%.
Ow, what could have been
That new rate may be higher than what it was but it is still lower than what it could have been, as Moore initially sought to raise the levy to 30% before lawmakers later agreed on 20%.
The initially stated reasons for a higher tax rate for mobile sportsbooks included that it would bring Maryland more in line with neighbors and perhaps “better align the state with the principles of sound tax policy.”
Whatever the reason, Maryland now joins states such as Illinois and Ohio (which also has a 20% tax rate) in increasing what online sportsbook operators originally had to pay to take bets from residents.
H.B. 352 makes other tax-related tweaks to Maryland sports betting, namely, that 5% of mobile sports wagering proceeds will now flow to the state's general fund. The remainder of sports betting-related tax revenue is earmarked for funding education.
More than $160 million in legal sports betting tax revenue has gone to the Blueprint for Maryland's Future Fund since December 2021. Maryland's tax rate for in-person sports betting revenue remains unchanged at 15%.
“This wasn’t just about balancing a budget,” Moore said in a press release announcing Tuesday’s bill signings. “It was about weathering two storms: A fiscal crisis and a new White House that attacks our economy.”
We inherited a long predicted structural deficit and a state economy that wasn’t growing.
— Governor Wes Moore (@GovWesMoore) May 20, 2025
But we didn’t kick the can down the road. We addressed this issue head on. pic.twitter.com/0Eg47boqEe
Sportsbook operators are facing the threat of tax hikes by state lawmakers every year now, and 2025 has been no different.
In addition to Maryland, it's possible bookmakers could still get hit with increases this year in North Carolina, Louisiana, and Ohio (again), among others.
Furthermore, starting next July, Colorado will no longer allow operators to deduct the value of free bets from their taxable revenue, which will increase their tax burden in the state.
Forecast calls for paying
Even before Moore signed H.B. 352, at least one sportsbook operator had already begun baking the higher, 20% tax hike in Maryland into their financial projections.
DraftKings forecast earlier this month that "tax and regulatory updates," including an increased Maryland sports betting tax rate, would help reduce revenue for 2025 by $30 million and adjusted EBITDA by $26 million.
The Boston-based company is one of 11 licensed online sportsbooks in Maryland.
DraftKings said that "Jackpocket shutting down digital lottery courier operations in Texas and New Mexico" would also contribute to the tax and regulatory-related hit to revenue and adjusted earnings this year.
