Maryland has increased its online sports betting tax rate from 15% to 20% to address a significant budget shortfall. While Governor Wes Moore sought a steeper hike and expanded gambling options, the legislature opted for a more moderate approach. Similar tax increases are being explored or implemented in several other states.
Maryland Approves Sports Betting Tax Hike
Maryland’s online sports betting operators will now pay a higher tax rate following the passage of HB352, the Budget Reconciliation and Financing Act of 2025. Signed by Governor Wes Moore, the legislation increases the tax rate from 15% to 20%.
Governor’s Proposal Scaled Back
Governor Moore originally proposed raising the rate to 30% and increasing the casino table game tax from 20% to 25%, but the legislature settled on the more modest sports betting tax hike. Lawmakers left out the casino tax increase entirely.
Currently, 95% of Maryland’s sports betting tax revenue is directed toward public education, with the remaining 5% going to the general fund. Lawmakers emphasized the importance of funding education, healthcare, and public services amid a $2.7 billion budget shortfall.
Online Casino Push Fails
Efforts to legalize online casinos, including poker, were also part of the budget debate. Despite bills introduced in both chambers, neither proposal advanced, delaying any decision on online casino legalization for at least another year.
Tax Hikes Becoming a Trend
Maryland’s decision mirrors a growing trend among U.S. states. North Carolina recently increased its sports betting tax from 18% to 36%, while states like New York, New Hampshire, and Delaware already enforce rates of 50% or higher. Illinois has adopted a sliding scale system with rates up to 41% for large operators. Meanwhile, New Jersey is considering raising both sports betting and online gaming taxes from 13% to 25%.
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