Maryland sets formal 20% tax rate for online sports betting operations
Upon signing HB352, Maryland's budget reconciliation and financing act, Governor Wes Moore incremented the state's online sports betting tax from 15% to 20%. The new tax rate, which took effect recently, comes as a response to a projected $2.7 billion budget shortfall. Initially, Moore had sought a 30% tax rate for online betting and a 25% increase for casino table games, yet legislators remained seized to the 20% rate.
Delegate Ben Barnes, House Appropriations Committee chair, encapsulated the legislative mindset during the session, stating, "All options are on the table right now to make sure we protect public education, health care, and vital services for Marylanders." The majority of the sports betting tax revenue continues to be allocated to education funding, while the remaining 5% supports the state's general fund.
Horizontal gaming alternatives, such as online casinos and poker, were proposed during the session, although failed to gain traction. For the meantime, online poker enthusiasts in Maryland must await at least 2026 for a potential shift.
The sports betting handle for April in Maryland totaled an impressive $513 million. Across the nation, various states are scrutinizing their sports betting tax frameworks. North Carolina's Senate has considered enhancing the tax rate, albeit specifics remain under wraps. Illinois has implemented a sliding scale that could escalate the tax rate to 41% for large operators. States like New York, Delaware, and New Hampshire continue to maintain taxes of 50% or higher on sports betting. Meanwhile, New Jersey Governor Phil Murphy has advocated for increasing both online gaming and sports betting taxes from the current 13% to 25%.
Ohio was mulling over doubling its sports betting tax from 20% to 40%, but legislators excluded that adjustment from the final budget. Conversely, Governor Mike DeWine has launched efforts to regulate event-based sports contracts offered by trading platforms, perceiving them as intruding on sports betting laws.
At the federal level, discussions have revolved around expanding the federal tax on sports betting, with some proposals suggesting a hike from 0.25% to 5%, although such proposals are not tied to any specific state.
[1] https://mgaleg.maryland.gov/webmga/frmMain.aspx?tab=subject6&rid=659[2] https://www.lasvegassun.com/politics/2021/11/15/moniz-revisiting-sports-betting-tax-a-loser-for-states/[3] https://www.pressofatlanticcity.com/government/top-tier-of-online-sports-betters-would-get-hit-hardest-under-murphys-proposal/article_774288f6-8bbd-5857-b6c9-f5e343b884b3.html[4] https://www.vocativ.com/400384/maryland-prohibits-online-casino-play/[5] https://law.justia.com/codes/north-carolina/2019/chapter/14-338/section/14-338-47/
- The governor's decision to increment the tax rate for online sports betting in Maryland to 20% has sparked discussions in other states about revising their sports betting tax frameworks, such as North Carolina, which is considering enhancing its tax rate.
- In the realm of politics and finance, lawmakers in Maryland remain open to exploring various measures, like online casinos and poker, to address budget shortfalls, however, these alternatives have yet to gain substantial traction, unlike sports betting.
